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The Florida legislature got something done with regard to the tax issue.

“While the tax reform package passed yesterday is not perfect, it does begin to address some of the inequities in the system,” says John Sebree, Florida Association of Realtors®’ (FAR) vice president of public policy. “Realtors support rolling back property tax rates and capping millage rates in order to provide homeowners and businesses with some much needed property tax relief. We were disappointed that legislators were not able to come to an agreement on the issue of “highest and best use” and how property is appraised. The legislature has pledged to work on this issue with us to secure additional relief.”

The gist of it…

Step 1: The two steps operate independently and cut taxes in different ways. Under step one, all cities and counties are required to cut taxes in the upcoming 2007-2008 fiscal year to 2006-2007 revenue levels. After determining that level, each county government must then cut an additional 3 percent, 5 percent, 7 percent or 9 percent. Cities’ property tax cuts are similar.

The specific amount each local government must cut depends on a formula. Residents of counties in which property taxes have risen the most will see the greatest savings. The bill also mandates yearly limits on tax increases. Local governments may increase tax revenues over time only by an amount based on local increases in personal income and new construction.

However, local governments are still allowed to override the proposed cut and caps, with the method – supermajority vote, referendum, etc. – for override approval depending on the magnitude of the change.

Step 2: To amend the Constitution, voters will be asked to replace “Save Our Homes” and the $25,000 homestead exemption with a new super-homestead exemption in January’s election. However, a last-minute agreement on the amendment allows homeowners to choose their tax, and those who save the most under the Save Our Homes amendment – generally long-time owners – may stay with that program as long as they remain in the same house. Amendment passage requires approval from 60 percent of voters.

The exemption has two tiers:
Tier 1: Homestead property will receive an exemption of 75 percent of the first $200,000 in value of the home; or, put another way, a taxable value of $50,000. The minimum exemption is $50,000 per homestead.

Tier 2: In addition to Tier 1, homestead property will obtain another 15 percent exemption for the next $300,000 in value. A $350,000 property, for example, would have a taxable value of $177,500 – $50,000 on the first $200,000, and $127,000 on the additional $150,000.

CLICK HERE to read the complete article on FAR’s web site.

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