Florida tax relief pretty paltry for housing boom buyers

Have your read the news about the latest property tax cut plan? If you bought a home at inflated prices during the housing boom of 2002-2006 - and that includes hundreds of thousands of Floridians - the savings are pitiful.

The state plans to double the homestead exemption by another $25,000, but by excluding school taxes, the taxable value of your house would go down only about $15,000.

In Pasco County, where I live, that would knock about $200 off a tax bill. It would mean slightly more savings in higher taxed counties and cities in Pinellas and Hillsborough. For all those people paying more than $5,000 in taxes each year, $200 is laughable.

Here's a word to the wise: After the recent property depreciation, you'd probably have better luck challenging your local property appraiser's assessment of your home.

My appraiser has my house valued $20,000 higher than my model is selling for down the street. Knocking that $20,000 off would put more money in my pocket, certainly more money than the crumbs from Tallahassee.

The Legislature is also pushing portability of the Save Our Homes tax cap. But it's not retroactive to home purchases further back than 2007. Again, the droves of people who bought during the boom don't get a share of those goodies.

In any case, it's in our hands. To make the tax plan a reality, we'd have to vote for the change on Jan. 29.

Comments

[DianaJ]

In order to use "portability", you did not have to buy your house in 2007 as you stated. Even your own newspaper states that portability will be retroactive if you bought your house in 2007 (per Alex Leary's article dated 10/29/07). "People who moved in 2007 could get the benefit retroactively"

[James Thorner (author of blog post)]

DianaJ,
Actually, in my blog post I said portability applies to homes bought in 2007 OR LATER. In other words, home purchases in 2007, 2008 and beyond will enjoy portability. I don't think that disagrees with the newspaper article.

[DianaJ]

As will those bought before 2007.

[James Thorner]

I'm afraid SOH portability will not be valid for homes bought earlier than 2007. It's not retroactive except for 2007 home purchases (remember this law wouldn't take effect until 2008). I bought my new house in 2006 so I'm out of luck. This reform creates two separate-and-unequal categories of Save Our Homes beneficiaries, layered upon the already unequal homesteaded versus non-homesteded properties.

[Jonathan Roy]

I was confused at first on the portability thing, but I see what you are saying. Portability is for any new purchases as well as anything purchased in 2007. On first read I thought you were saying only people that buy in 2007 or later will have portability for their next purchase afterwards.

I think that was Diane's confusion as well. Anyone who bought a home, at any time, will have portability for their next move in the future. But people who bought in 2007 will benefit as if the law was already in place and have their save our cap adjusted accordingly.

[Willie]

Hello Anyone,
Can anybody shed some light on the situation of an owner of a $400,000 home bought 4 years ago with current taxes of $3900. He sells and downsizes to a $200,000 home. Question: if I'm taking my "cap" with me, are my taxes on the new home going to be what I am currently paying on this house or will I just take over the current taxes on the new home? In other words, does it benefit anyone to downsize with the possible change? Thanks in Advance for any light!

[Willie]

Can't any of the legislators hear the pleas of a dying Florida. Boomers are not going to want to come here as was predicted with the current tax situation. Builders stopped building (no buyers), Real estate transactions, buying and selling, at an all-time low, First time buyers can't afford the current prices, Landlords (not with homestead exemptions have to raise rents to keep up with taxes and insurance making it impossible for people making small incomes to stay. I'm with the guy who said "let's vote them all out until they hear our cries". Write your congressman and tell them how poorly you feel they did with this tax change. They did nothing for businesses either. Are there cellphones dead or their brains? Good thing they helped us so much with our property insurance ($8 savings) or we'd really be in deep doo doo!

[James Thorner]

Willie,
This portability measure was designed with your case in mind: downsizers who would pay more in taxes on the new, cheaper home than they did on the old, more expensive home. Every case if different, but your person would likely save a little money on taxes by moving. Today's (11/1/07) St. Petersburg Times had a similar example to the one you stated and showed all the numbers.