This past summer legislation was set in place to allow for the largest property tax cut in Florida’s history. The packet, labeled “Amendment 1”, has 2 main components. First, law was passed requiring local governments to roll-back taxes this year and then to “grow at a responsible rate” in the future. The Second part needs to be voted in by Florida residents in January 29, 2008.
The 2 main provisions to be voted in are; to double the homestead exemption (from $25,000 to $50,000) and to improve on the existing “Save Our Homes” benefit, plus make it portable.
The doubled homestead ($50k) will apply to homes with a just value of over $75,000… which is most Florida homes. Homes valued under $75k will also get a smaller increase to homestead exemption.
Portability means that if Joe Owner decides to sell and purchase a new home, he will be able to take with him the Save Our Homes exemption he has enjoyed in the existing home and apply it to the new one. (Many locals have considered moving, but without portability the taxes in the new home make the payments to high.)
Let’s say you bought a Kissimmee house in 1991 for $85,000 and in today’s market it is worth $240,000 with and assessed value of $120,000; in this case you could transfer the whole $120,000 difference to the purchase of a bigger home. Let’s say you bought a $350,000 new home in Orlando, annual taxes would be about $5,500 without portability. But if we include the tax savings (double homestead exemption and Save Our Homes portability) that Amendment 1 will provide then annual taxes will be little more than half or about $3,100.
If you were looking to get a smaller place instead, you would also be able to take your existing Save Our Homes deduction into the new place.
In summary, Amendment 1 will not only help seniors wanting to downsize and growing families wanting to upsize, it will also attend to the issues of those having rental properties or the business owners who is affected by the constantly rising property values. How to save on Florida property taxes? Vote for Amendment 1 on January 29, 2008.
Coldwell Banker Ackley Realty