Wednesday, April 18, 2007

Florida Property Tax Update - Republican Bill Passes in the House

Breaking News from the regarding the Florida Property Tax resolutions are still not addressing the immediate needs of those hardest hurt by the high cost of property taxes throughout the state.



As the Republicans control the Florida House, there was little doubt that their bill would get the majority.

Unfortunately, the "Time is of the Essense" clause of Real Estate did not seem to compel these Florida Law Makers to affect a change any sooner than 2009 if this becomes a true Amendment to the Florida Constitution. 

The Florida House, in its infinite wisdom has proposed the Florida Tax Bill go on the ballot in the 2008 elections if it gets passed by the State Senate... which it probably will as they're a Republican Majority as well.

The Republican Bill centers around the now notorious Property Tax for Sales Tax Swap that Art Blanchet focused a post on... the actual impact of this PHASE of the Tax bills in session would cut $25 to $35 Billion from the State revenues over the first five years.... and this is even with the proposed sales tax increase!

The article in the noted that this Amendment would officially make Florida the ONLY State with no Property Tax AND no State Income Tax!.... but it would also be the State with the highest Sales Tax!

The other bills in session? (HB=House Bill)

  • HB7001 - would roll back property taxes to their 2000-2001 levels and cap them.  This bill passed unanimously.
    This would have a dramatic effect on the ability of people to upgrade from a starter home to a family home.
  • HB261this one affects Nick M The Appraiser ... it modifies assessment practices. 
    In a prior post I mentioned the feud between the Palm Beach County and Broward County appraisors over assessing property "As Developed" the Broward County Stand vs "Potential Use" or Highest and Best Use as the Palm Beach County Stand.  Obviously assessing a house for its current usage rather than future (potential) usage will mean that the property is valued more fairly.  The problem really lies with lower income areas where eminent domain is an issue.  A property that houses Section 8 might be in the Path of Progress and all of a sudden the people can't afford to hold the property and rent it out because taxes are too high.  The property is still worth what it is worth but all of a sudden the land is worth a fortune.
  • HB1483 - this limits local governments abilities to increase taxes.  This is in reaction to several municipalities with add-ons to the main city or county taxes. 
    There are several municipalities (like Greenacres) which are more highly taxed than areas just 1-2 blocks away!  This is an unfair practice and creates undue financial strain on property owners in those areas.

All four of these measures go to the State Senate next...

But that's not the end of it!

The State Senate is voting on Friday on its own plan.  It would not be as sweeping as the House bill as it would only save $12.3 Billion in its first five years.  The plan would roll back taxes to their 2003-2004 levels instead of all the way to 2000-2001.

Now... here's where it gets really interesting. 

Bills are passed - Amendments are elected....

HB7001 could be immediate... but if voters in 2008 decide they like the forthcoming Amendment better than the bill, they can vote the Amendment in, which would immediately supercede the bill!  So if the Senate Plan passes as an Amendment, then the tax roll back would be defeated.

Getting back to Sales Tax... The immediate Sales Tax hike would be 1% going towards schools.  Then local governments would have the option of raising it another 1-1.5% depending on their needs.  The highest Sales Tax would be is 8.5%.

Now... I wonder how this will play out in the Senate on Friday!

The really interesting part is that the Democrats have the more sweeping ideas and favor a larger cut in taxes... The Republicans a smaller... but Republican Governor Charlie Crist has not weighed in officially... but sources have quoted him as saying "The Bigger the Better" (paraphrase)

More Florida Mortgage and Real Estate News You Can Use From
David A. Podgursky, MBA
The Mortgage Go To Guy
Your Source for Residential, Commercial, Investment and Relocation Mortgages in Florida

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