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Florida property Tax reform

With the removal of Amendment 1 from the ballot on January 29^th, the Governor and Legislature are working to get a new proposal ready for the ballot during the Special Session that has been prolonged through October 22nd. The phase-out of Save Our Homes and the Super-Homestead Exemption portion of that amendment appear dead.

Call Evandro Santos @ (954) 547 6591  or Ana Treter @ (954) 558 5480 for your Miami real estate needs or email us at info@bestofmiamiproperties.com

Proposals, ideas, and press conferences are at a breakneck pace on the property tax issue this week. The Governor has outlined a plan and is personally asking Legislators to vote for it during special session next week.

His proposed constitutional amendment, which he wants the voters to see on January 29^th, 2008, would:

- Double the homestead exemption to $50,000 (though school board taxes would stay exempt at $25,000) that would increase with CPI each year

- Offer a blanket 25% homestead exemption for owners of homestead properties who have never owned homestead property in Florida

- Allow unlimited statewide portability of Save Our Homes exemption to homesteaders (excluding the school board tax portion) by allowing the full amount to be carried to the next homestead if buying up; if buying down the new assessed value would be equal to the old homestead’s assessed value to market value ratio

- Exempt the first $25K of the tangible personal property taxes paid by businesses and mobile home owners

Call Evandro Santos @ (954) 547 6591  or Ana Treter @ (954) 558 5480 for your Miami real estate needs or email us at info@bestofmiamiproperties.com

- Apply an across-the-board revenue cap on local governments, including property taxes (already in law), and collection of almost all fees and taxes – including impact fees, local business taxes, utility fees, and licenses. This will provide additional protection across the board for all property owners.

- Equals $6.3 billion in savings over 5 years statewide

That is how the plan is laid out now, but again – much is subject to change over the next few days. Governor Crist seems open to exempting a higher portion of a homestead property value, and he’s mentioned the third tier, from $50K - $75K. This issue was specifically mentioned as an alternative in discussions between John Sebree and top aides to Governor Crist yesterday.

The Senate plan will be unveiled later this week, but through our meetings with top legislators and staff we’ve learned that it will likely:

- Offer statewide portability of a limited amount of Save Our Homes savings, and have it limited over time. EXAMPLE: John Smith ports $200,000 in savings value to his next homestead, but every year his assessed value will rise by 8% (no matter what), and eventually (after 12-15 years) raising his assessed value to his purchase price. At that point, his assessed value reverts back to the Save Our Homes value of 3%. The Senate claims that this is a federal constitutionally-sound method of providing portability.

- Offer a 50% homestead exemption to owners of homestead properties who have never owned homestead property in Florida, and have that phase out over 5 years OR offer a larger homestead exemption of $50,000 that phases out over 5 years (and leaves them with a $25,000 exemption). This may ONLY apply to homes bought at or below median home price in the area.

- Exempt the first $25K of the tangible personal property taxes paid by businesses and mobile home owners

- Allow for assessment changes for working waterfront properties

- A non-homestead and commercial assessment cap (similar to Save Our Homes) at 8 or 10 percent maximum per year

Again, we will know more specifics in the coming days, but we’re fairly confident that this will be the crux of the Senate proposal.

Call Evandro Santos @ (954) 547 6591  or Ana Treter @ (954) 558 5480 for your Miami real estate needs or email us at info@bestofmiamiproperties.com

The House plan will be unveiled later this week as well, but we’ve learned the following today: the House Republicans want more dollar savings ($3 billion), and while not completely agreeing with all concepts the Governor has laid out, want the following to be included as well:

- Total elimination of property taxes for low income seniors

- Targeted relief for affordable housing

- Targeting relief for working waterfront properties

- Additional property tax relief for property owners making energy efficient improvements to homestead and non-homestead owners

- Eliminate the “presumption of correctness” of local property appraisers, and make the Miami-Dade Property Appraiser an elected - rather than appointed - position

Both the House and Governor insist that this is not the end of tax reform in any case, but the Senate is sending messages that they want to end most property tax reform talk until 2009 if a ballot proposal in January passes. There is also some concern around Tallahassee that the House may throw up their hands and not be able to come to any agreement with the Senate on a ballot property tax reform measure. Several FAR lobbyists are having lunch with Speaker Rubio today, and we’ll know more details on the House position after that meeting.

Call Evandro Santos @ (954) 547 6591  or Ana Treter @ (954) 558 5480 for your Miami real estate needs or email us at info@bestofmiamiproperties.com

Please let us know your thoughts, concerns, and questions about these proposals that are on the table. Using the attached document – which spells out what was ratified in January’s Board of Director’s meeting – and Legislative Leadership Team input, we will do a “Call To Action” that will combine the best aspects of all plans.

Finally, please be ready for the urgent “Call To Action” on property taxes in the near future!