Property tax consultants are in their glory these days. Instead of causing conversation to grind to a halt, property taxes are suddenly a hot topic at every luncheon, networking meeting and cocktail party. So, in the spirit of gathering our rosebuds while we may, what follows is the latest scuttlebutt on what may be offered in terms of property tax reform at the about-to-be-convened special session of the Florida legislature.
Those in the know are already aware that the special session of June 12-23 has been scheduled for the purpose of resolving the impasse between the State House and Senate about what to do to cure inequities in Florida’s property tax system.
At the start of the regular legislative session, Florida House Speaker Marco Rubio (R-West Miami) unveiled a plan intended to eliminate all property taxes on homestead residences. This was to be accomplished by raising sales tax by as much as 2.5 cents to 8.5 cents on the dollar.
The Florida Senate and Governor Charlie Crist opposed the sales-tax increase. Since no alternative plan was approved by both House and Senate, the 11-day special session will be the legislature’s last chance this year to resolve the property tax conundrum.
In the event no consensus comes out of the special session, Florida’s regular 20-year constitutional revision commission is expected to be called upon to address the property tax puzzle. Indeed, since many of the property tax bills filed during the regular legislative session have constitutional implications, the revision commission will have a multiplicity of property tax issues to discuss in any event.
Watch for the Senate’s first female president--and one of our favorite role models--Senator Gwen Margolis (D-N. Dade) to play a leadership role in the constitutional revision commission’s discussion of property tax reform. Sen. Margolis is a former chair of the Miami-Dade County Commission and the Miami-Dade County Value Adjustment Board, and is a property tax maven of the first order.
To get back to the legislature’s special session, it is apparent that Speaker Rubio will be prepared to abandon the trade-off of sales taxes for complete exemption for homesteads. Rubio is floating a new plan to cut property taxes by dramatically increasing the state's homestead exemption and giving a break to all other property owners.
Under Rubio’s revised plan, Florida homeowners would no longer have to pay property taxes on as much as 80% of the first $300,000 in value of their primary—or homestead—residence. The concept of linking property-tax cuts to a percentage of property values appears to be one which will garner philosophical and economic support in both the House and Senate. This cross-chamber, cross-party popularity distinguishes the increase in homestead benefit from the sales tax increase idea, which is traditionally regarded as regressive, having a disproportionate impact on wage earners, since a larger percentage of their disposable income would be consumed by a 40% increase in the level of sales taxes.
Watch this space for discussion of more Florida property tax news as it develops.
_______________________________________________________
Daniel A. Weiss has over 26 years experience as a Florida property tax attorney. Daniel Weiss was named in the 2007 Annual Edition of the South Florida Legal Guide as one of the top lawyers in the practice area of Real Estate - Land Use, Zoning & Environmental.
For a free consultation regarding your property, contact Click here
Showing posts with label homestead exemption. Show all posts
Showing posts with label homestead exemption. Show all posts
Friday, May 11, 2007
Tuesday, February 27, 2007
Florida Property Tax News: Homestead Exemptions Continued After Building Damaged or Destroyed By Misfortune or Calamity— Or Intentional Demolition?
The 2006 Florida Legislature adopted a statute intended to preserve homestead exemption status of property damaged or destroyed by misfortune or calamity. Section 196.031(7), Florida Statutes, is effective January 1, 2006. Thus, it applies retroactively to the 2006 tax assessment roll, as well as to all future years’ rolls.
In summary, this new law provides that homestead exemption can be granted when a homestead property is damaged or destroyed by misfortune or calamity and is uninhabitable on January 1 after the damage if the property otherwise qualifies and the property owner notifies the property appraiser that he or she intends to repair or rebuild the property and live in it as the primary residence after it is repaired or rebuilt and the owner does not claim a homestead exemption on any other property. Failure by the owner to commence the repair or rebuilding within 3 years constitutes abandonment.
The law specifically revised section 196.031, Florida Statutes, as follows:
196.031 Exemption of homesteads.—
(7) When homestead property is damaged or destroyed by misfortune or calamity and the property is uninhabitable on January 1 after the damage or destruction occurs, the homestead exemption may be granted if the property is otherwise qualified and if the property owner notifies the property appraiser that he or she intends to repair or rebuild the property and live in the property as his or her primary residence after the property is repaired or rebuilt and does not claim a homestead exemption on any other property or otherwise violate this section. Failure by the property owner to commence the repair or rebuilding of the homestead property within 3 years after January 1 following the property’s damage or destruction constitutes abandonment of the property as a homestead.
Notably, the new relief ostensibly created by this statute has been advocated successfully by the author of this article as though it were already authorized. We have successfully taken the position on behalf of a number of different taxpayers that homestead exemption and the Save Our Homes Cap, once established, so long as it is not abandoned, can survive destruction of the improvements. Moreover, we have successfully taken this position even where the destruction was due to intentional demolition for planned redevelopment, and not solely due to misfortune or calamity. This position we believe to be well-founded, since permanent residence is not necessarily synonymous with physical occupancy—County Property Appraisers’ sometime position to the contrary notwithstanding.
Generally, we find our position on preservation of homestead exemption during and after demolition for rebuilding a private residence acceptable to the County Property Appraiser provided the following general guidelines are considered:
1. Reasonableness of length of absence from the homestead property, depending on the size and scope of the remodeling, renovation or reconstruction;
2. Factual indicia of continuing permanent residence;
3. Other place(s) of residency during absence from homestead;
4. Intention to return to homestead property upon completion of renovation, remodeling or reconstruction;
5. Applications for or status of homestead exemption or residency benefit elsewhere than on the property claimed as continuing homestead;
6. Any changes in applicable law.
Our policy—just as is the policy enshrined in the above-quoted newly-adopted statute—is to put the Property Appraiser on notice so as to attempt to prevent revocation of homestead during the period of reconstruction. In regard to estimating the time period involved, we ask the Property Appraiser to consider each case on its own facts in relation to the foregoing criteria. For example, if there were particular problems with a contract or a construction project, such facts should appropriately be reviewed when considering how long the taxpayer is physically absent from the homestead property. We believe this procedure sets a good example for other Florida property tax lawyers who desire to improve the quality of service provided to taxpayer clients
We take pains to make clear to the taxpayer—and to acknowledge to the Property Appraiser our understanding--that the work on the property and value added thereby will be assessed on the next succeeding tax roll in addition to value of the improvements in a prior year—or in lieu of the improvements if there is a complete demolition. Obviously, this added valuation should be done in a manner consistent with the constitution, the governing statutes and prevailing policies.
In the case of complete demolition, then, the only portion of the property which would be capped under the “Save Our Homes Amendment” would be the land. In many locations in Florida, particularly for waterfront properties homesteaded since the inception of the Save Our Homes Cap in 1996, tax savings can run into the tens of thousands of dollars annually.
If you have any questions or concerns about how this new statute relates to your property, or how to protect and preserve your homestead exemption from property taxation during periods of demolition and rebuilding, see your property tax consultant.
Also, remember to review the assessment of the new improvement the first time it appears on your Notice of Proposed Taxes in August. Be sure to consider appealing the assessment if you believe the Property Appraiser has assessed the improvements in excess of market value. You may have to contact the Property Appraiser’s office, or view your assessment online, to ascertain the value assigned separately to the improvements. The split between land value and building value do not appear on the state-approved form for the notice of proposed property taxes, although proposed revision are in the legislative hopper for 2007. And in making the decision whether to appeal, remember that (1) the cost approach to valuation of real estate is particularly applicable to new construction; and (2) the improvement valuation will be included in the assessment (together with the capped value on the land) to comprise your new homestead exemption base year assessment for all future years under the Save Our Homes cap. So don’t neglect timely undertaking this important decision-making process.
_______________________________________________________
Daniel A. Weiss is a former Attorney Special Master for the Miami-Dade County Value Adjustment Board with over 26 years property tax experience. Mr. Weiss represented the Miami-Dade County taxing authorities in litigation and appeals between 1981 and 1995 and has since represented taxpayers in property tax matters. Mr. Weiss was named one of the top lawyers in real estate, zoning and land use by South Florida Legal Guide 2007. In Florida Super Lawyers 2006, Weiss was named one of the top 6 local government lawyers in South Florida.
In summary, this new law provides that homestead exemption can be granted when a homestead property is damaged or destroyed by misfortune or calamity and is uninhabitable on January 1 after the damage if the property otherwise qualifies and the property owner notifies the property appraiser that he or she intends to repair or rebuild the property and live in it as the primary residence after it is repaired or rebuilt and the owner does not claim a homestead exemption on any other property. Failure by the owner to commence the repair or rebuilding within 3 years constitutes abandonment.
The law specifically revised section 196.031, Florida Statutes, as follows:
196.031 Exemption of homesteads.—
(7) When homestead property is damaged or destroyed by misfortune or calamity and the property is uninhabitable on January 1 after the damage or destruction occurs, the homestead exemption may be granted if the property is otherwise qualified and if the property owner notifies the property appraiser that he or she intends to repair or rebuild the property and live in the property as his or her primary residence after the property is repaired or rebuilt and does not claim a homestead exemption on any other property or otherwise violate this section. Failure by the property owner to commence the repair or rebuilding of the homestead property within 3 years after January 1 following the property’s damage or destruction constitutes abandonment of the property as a homestead.
Notably, the new relief ostensibly created by this statute has been advocated successfully by the author of this article as though it were already authorized. We have successfully taken the position on behalf of a number of different taxpayers that homestead exemption and the Save Our Homes Cap, once established, so long as it is not abandoned, can survive destruction of the improvements. Moreover, we have successfully taken this position even where the destruction was due to intentional demolition for planned redevelopment, and not solely due to misfortune or calamity. This position we believe to be well-founded, since permanent residence is not necessarily synonymous with physical occupancy—County Property Appraisers’ sometime position to the contrary notwithstanding.
Generally, we find our position on preservation of homestead exemption during and after demolition for rebuilding a private residence acceptable to the County Property Appraiser provided the following general guidelines are considered:
1. Reasonableness of length of absence from the homestead property, depending on the size and scope of the remodeling, renovation or reconstruction;
2. Factual indicia of continuing permanent residence;
3. Other place(s) of residency during absence from homestead;
4. Intention to return to homestead property upon completion of renovation, remodeling or reconstruction;
5. Applications for or status of homestead exemption or residency benefit elsewhere than on the property claimed as continuing homestead;
6. Any changes in applicable law.
Our policy—just as is the policy enshrined in the above-quoted newly-adopted statute—is to put the Property Appraiser on notice so as to attempt to prevent revocation of homestead during the period of reconstruction. In regard to estimating the time period involved, we ask the Property Appraiser to consider each case on its own facts in relation to the foregoing criteria. For example, if there were particular problems with a contract or a construction project, such facts should appropriately be reviewed when considering how long the taxpayer is physically absent from the homestead property. We believe this procedure sets a good example for other Florida property tax lawyers who desire to improve the quality of service provided to taxpayer clients
We take pains to make clear to the taxpayer—and to acknowledge to the Property Appraiser our understanding--that the work on the property and value added thereby will be assessed on the next succeeding tax roll in addition to value of the improvements in a prior year—or in lieu of the improvements if there is a complete demolition. Obviously, this added valuation should be done in a manner consistent with the constitution, the governing statutes and prevailing policies.
In the case of complete demolition, then, the only portion of the property which would be capped under the “Save Our Homes Amendment” would be the land. In many locations in Florida, particularly for waterfront properties homesteaded since the inception of the Save Our Homes Cap in 1996, tax savings can run into the tens of thousands of dollars annually.
If you have any questions or concerns about how this new statute relates to your property, or how to protect and preserve your homestead exemption from property taxation during periods of demolition and rebuilding, see your property tax consultant.
Also, remember to review the assessment of the new improvement the first time it appears on your Notice of Proposed Taxes in August. Be sure to consider appealing the assessment if you believe the Property Appraiser has assessed the improvements in excess of market value. You may have to contact the Property Appraiser’s office, or view your assessment online, to ascertain the value assigned separately to the improvements. The split between land value and building value do not appear on the state-approved form for the notice of proposed property taxes, although proposed revision are in the legislative hopper for 2007. And in making the decision whether to appeal, remember that (1) the cost approach to valuation of real estate is particularly applicable to new construction; and (2) the improvement valuation will be included in the assessment (together with the capped value on the land) to comprise your new homestead exemption base year assessment for all future years under the Save Our Homes cap. So don’t neglect timely undertaking this important decision-making process.
_______________________________________________________
Daniel A. Weiss is a former Attorney Special Master for the Miami-Dade County Value Adjustment Board with over 26 years property tax experience. Mr. Weiss represented the Miami-Dade County taxing authorities in litigation and appeals between 1981 and 1995 and has since represented taxpayers in property tax matters. Mr. Weiss was named one of the top lawyers in real estate, zoning and land use by South Florida Legal Guide 2007. In Florida Super Lawyers 2006, Weiss was named one of the top 6 local government lawyers in South Florida.
In Florida Trend magazine™'s Legal Elite's issue, July 2004, Mr. Weiss was selected by his peers as one of the top 30 government lawyers in the State of Florida.
For a free consultation regarding your property, contact us.
Thursday, January 11, 2007
Florida Property Tax News: Legislature Provides Tax Relief on Homestead Property Damaged or Destroyed by Misfortune or Calamity, Including Hurricanes
It’s an ill wind that blows no good.
--English proverb
The ill winds of Hurricane Katrina and Hurricane Wilma at least motivated the Florida Legislature to provide property tax relief to homestead residents. In rebuilding homestead property, no additional assessment valuation will be added to homestead property if the square footage is increased by 10% or less or if the building is rebuilt to 1,500 square feet or less.
This statutory amendment provides relief only where all or a portion of homestead property is damaged or destroyed by misfortune or calamity. Voluntary demolition and rebuilding not precipitated by misfortune or calamity does not qualify.
If, however, the damage or destruction of the homestead property results from misfortune or calamity, either of two circumstances will qualify for the relief provided. Because misfortune and calamity are not defined by the statute, it may safely be assumed that these terms will be applied by the courts in accordance with dictionary definitions, unless and until such definitions are narrowed by State Department of Revenue regulations.
Thus, misfortune and calamity may reasonably be understood to include fire, tornado, hurricane, flood and what are frequently referred to in legal documents and literature by the apparently faith-based terminology of “acts of God.”
Given the threshold requirement of misfortune or calamity, tax relief is provided by the Legislature under either of two separate sets of circumstances.
First, if the square footage changed or improved because of the misfortune or calamity does not exceed 110 percent of the square footage before the damage, no additional valuation will be added to the tax assessment roll for the homestead property in question.
In the alternative, and irrespective of the 110% rule, the assessed value shall not increase if the total square footage of the property after it is changed or improved does not exceed 1,500 square feet. This means that even if the house was, say, 1,000 square feet before the misfortune or calamity, rebuilding it to 1,500 square feet will not increase the taxable value. This is noteworthy from a practical standpoint, since it means even an increase of a full 50% or more in size, providing the end result measures 1,500 square feet or less, does not increase the tax base for the homestead property.
These two new statutes are also interesting from a constitutional standpoint. The Florida Constitution provides that all property must be assessed at market value, unless expressly provided otherwise in the Constitution. Market value means the amount that a willing buyer will pay to a willing seller, both fully informed as to the circumstances, and neither under duress to make the transaction.
The question that naturally arises is the following one. Will a 1,000 square foot house have the same market value as a 1,500 square foot house, all other things being equal? Clearly, the answer is no. as with many constitutional questions, this one may never be raised. Remember, legal eagles, only a person with a legally cognizable injury, otherwise known as standing, is authorized to pursue a lawsuit. Intellectual curiosity does not confer standing.
In summary, this new law provides that changes, additions, or improvements that replace all or a portion of homestead property damaged or destroyed by misfortune or calamity shall not increase the assessed value of the homestead if the square footage changed or improved does not exceed 110 percent of the square footage before the damage. Also, the assessed value shall not increase if the total square footage of the property after it is changed or improved doesn’t exceed 1,500 square feet.
The change allows for rebuilding homestead property damaged or destroyed to a total size of 1,500 square feet without any assessment increase. For such buildings the homestead property's assessed value shall be increased by the just value of that portion of the changed or improved homestead property that exceeds 1,500 square feet. That would in effect eliminate the 110 percent rule for properties of less than 1,500 square feet.
___________________________________________________________________________________
Daniel A. Weiss is a former Attorney Special Master for the Miami-Dade County Value Adjustment Board with over 25 years property tax experience. Mr. Weiss represented the Miami-Dade County taxing authorities in litigation and appeals between 1981 and 1995 and has since represented taxpayers in property tax matters. Mr. Weiss was named one of the top lawyers in real estate, zoning and land use by South Florida Legal Guide 2007. In Florida Super Lawyers 2006, Weiss was named one of the top 6 local government lawyers in South Florida.
--English proverb
The ill winds of Hurricane Katrina and Hurricane Wilma at least motivated the Florida Legislature to provide property tax relief to homestead residents. In rebuilding homestead property, no additional assessment valuation will be added to homestead property if the square footage is increased by 10% or less or if the building is rebuilt to 1,500 square feet or less.
This statutory amendment provides relief only where all or a portion of homestead property is damaged or destroyed by misfortune or calamity. Voluntary demolition and rebuilding not precipitated by misfortune or calamity does not qualify.
If, however, the damage or destruction of the homestead property results from misfortune or calamity, either of two circumstances will qualify for the relief provided. Because misfortune and calamity are not defined by the statute, it may safely be assumed that these terms will be applied by the courts in accordance with dictionary definitions, unless and until such definitions are narrowed by State Department of Revenue regulations.
Thus, misfortune and calamity may reasonably be understood to include fire, tornado, hurricane, flood and what are frequently referred to in legal documents and literature by the apparently faith-based terminology of “acts of God.”
Given the threshold requirement of misfortune or calamity, tax relief is provided by the Legislature under either of two separate sets of circumstances.
First, if the square footage changed or improved because of the misfortune or calamity does not exceed 110 percent of the square footage before the damage, no additional valuation will be added to the tax assessment roll for the homestead property in question.
In the alternative, and irrespective of the 110% rule, the assessed value shall not increase if the total square footage of the property after it is changed or improved does not exceed 1,500 square feet. This means that even if the house was, say, 1,000 square feet before the misfortune or calamity, rebuilding it to 1,500 square feet will not increase the taxable value. This is noteworthy from a practical standpoint, since it means even an increase of a full 50% or more in size, providing the end result measures 1,500 square feet or less, does not increase the tax base for the homestead property.
These two new statutes are also interesting from a constitutional standpoint. The Florida Constitution provides that all property must be assessed at market value, unless expressly provided otherwise in the Constitution. Market value means the amount that a willing buyer will pay to a willing seller, both fully informed as to the circumstances, and neither under duress to make the transaction.
The question that naturally arises is the following one. Will a 1,000 square foot house have the same market value as a 1,500 square foot house, all other things being equal? Clearly, the answer is no. as with many constitutional questions, this one may never be raised. Remember, legal eagles, only a person with a legally cognizable injury, otherwise known as standing, is authorized to pursue a lawsuit. Intellectual curiosity does not confer standing.
In summary, this new law provides that changes, additions, or improvements that replace all or a portion of homestead property damaged or destroyed by misfortune or calamity shall not increase the assessed value of the homestead if the square footage changed or improved does not exceed 110 percent of the square footage before the damage. Also, the assessed value shall not increase if the total square footage of the property after it is changed or improved doesn’t exceed 1,500 square feet.
The change allows for rebuilding homestead property damaged or destroyed to a total size of 1,500 square feet without any assessment increase. For such buildings the homestead property's assessed value shall be increased by the just value of that portion of the changed or improved homestead property that exceeds 1,500 square feet. That would in effect eliminate the 110 percent rule for properties of less than 1,500 square feet.
___________________________________________________________________________________
Daniel A. Weiss is a former Attorney Special Master for the Miami-Dade County Value Adjustment Board with over 25 years property tax experience. Mr. Weiss represented the Miami-Dade County taxing authorities in litigation and appeals between 1981 and 1995 and has since represented taxpayers in property tax matters. Mr. Weiss was named one of the top lawyers in real estate, zoning and land use by South Florida Legal Guide 2007. In Florida Super Lawyers 2006, Weiss was named one of the top 6 local government lawyers in South Florida.
In Florida Trend magazine™'s Legal Elite's issue, July 2004, Mr. Weiss was selected by his peers as one of the top 30 government lawyers in the State of Florida.
For a free consultation regarding your property, contact us.
HOMESTEAD EXEMPTION PROPERTY TAX "TRAP"
During the 2005 session of the Florida Legislature, the homestead property exemption "trap" was identified for the first time. The "trap" consists of the disincentive to relocation due to the consequences of loss of the Save Our Homes "cap" on property already owned combined with the prospect of purchasing another property, giving rise to reassessment and loss of the cap. Many residential property owners feel "trapped" in their present location since costs of the new property--even if a much smaller or much less-valuable property--exceed those of the existing property as a result of the property tax consequences.
The homestead property tax "trap" is the phenomenon which gave rise to no less than three proposals in the 2005 legislative session for "portability" in whole or in part of accumulated Save Ours Homes "cap" benefits accrued on property.
The consequences of the Amendment 10 "cap" are so extreme as a result of 12 years of application since inception that some properties, especially in South Florida, have an assessed or taxable value of less than 1/3 of the fair market value. This means that two identical homes adjacent to each other can--and sometimes do--have tax bills with a 200% variation even though their values and tax (i.e. millage) rates are identical!
Cases in point include the following.
Eileen Rennick, a widow, moved to Century Village in Deerfield Beach in 1999. She became accustomed to paying $104 a year in taxes on a one-bedroom condominium unit. But two years ago, when she moved across the street into a two-bedroom condo unit, her taxes increased by 900%, to $1,040 a year. "It's outrageous," Rennick said, adding that she would not have moved if she had been aware of the dramatic impact of the change in property taxes.
Randy Aube of Boca Raton would like to move to Broward County, but he's afraid he can't afford the taxes. He pays $4,300 a year in property tax on the house he has lived in for six years. If he moves and buys a place of similar value, his property taxes will triple to $14,000.
Aube wrote in a recent letter to State Representative Adam Hasner (R., Delray Beach), "My next-door neighbor, who bought his house a few years after I did, is paying about twice as much [in property taxes]. That just doesn't make any sense. I know this is a huge complicated problem, but if it doesn't get fixed, it's only going to get worse."
Upset about the homestead exemption property tax "trap," South Florida homeowners can address their concerns directly to state legislators of both parties at town hall-type meetings across the state in the ensuing months. Eight town hall-style hearings are scheduled. See this blog for dates and times of hearings in Fort Lauderdale and Miami during the second week of February.
The hearings will provided grist for the legislative mill in the upcoming session, which will start in March.
Newly-elected Governor Charlie Crist and many legislators want to reduce taxes people pay on their homes. They are discussing a constitutional amendment that legislators would propose and voters approve or disapprove in statewide elections to be held as early as this summer. The proposal, among other things, would double the current $25,000 homestead exemption, which lowers the assessed and taxable value of a home. Under the existing exemption, the owner of a $200,000 house pays property tax on $175,000 of that value. If such a proposal passes, the taxable value would be reduced to $150,000.
The Republican governor also wants to let homeowners take some or all of their so-called "Save Our Homes" tax savings if they move. A 13-year-old constitutional provision caps tax increases at 3 percent a year (or the cost-of-living increase, whichever is less) no matter how much the value of a home increases. But those savings are lost when a homeowner moves, and the cap doesn't apply to businesses, rental properties or vacation homes.
This month, Crist and legislators concurred on changes to cut property insurance rates. Property tax issues promise to be hinkier and more controversial.
Local government officials say tax cuts of any significance will reduce public funds avalable for local parks, salaries of police officers and firefighters and other essential public services.
Lauderdale Lakes Finance Director Larry Tibbs is among those who are worried. He says if homestead exemptions are doubled, his city alone would lose more than $1 million annually. Mr. Tibbs said, "To make up that difference, Lauderdale Lakes would have to raise the millage rate."
Consequences would be even worse for Miami-Dade County municipalities which have a stable and predominant tax base of homes owned by permanent residents. North Miami and South Miami quickly come to mind.
Governor Crist cogently suggests that local governments, which have expanded their budgets during the past several years due to swollen tax bases resulting from a booming real estate market, should pull in their belts and spend less.
"They are going to have to have a little more discipline at the local level to help the people," said Governor Crist.
Some Republican legislators joined the chorus of those calling for spending cuts by cities, counties and other taxing authorities. They say total property taxes levied at the local level ascended from $16.6 billion in 2001 to $30.4 billion in 2006, an 83.1% increase that nearly septupled the 12% population growth during the same period.
"Florida doesn't have a revenue problem. We have a spending problem,"
said Senator Mike Haridopolous (R., Indialantic), chairman of the Senate Finance and Tax Committee.
Palm Beach County resident Larry Zalkin, who serves on a county advisory board, agrees that it's time for Florida to reduce property taxes, even if it means slashing city and county budgets. "This is the ideal time to fix the situation" by sharing budget surpluses with the public which funded them, opined Mr. Zalkin.
The property tax debate is gaining momentum after fizzling during the 2005 legislative session. State legislative leadership says everything is on the table, even though House Speaker Marco Rubio insists any tax cuts be across the board and be combined with stringent spending caps for cities, counties and school districts.
"[Property tax cuts] have to help the owner of the apartment building, so that hopefully they'll pass it through to their tenant. It also has to help the owner of the laundromat or the dry-cleaning store at the corner," said Rubio (R., West Miami).
For better or worse, watch for the 2006 legislative session to study all, and implement some, of the proposals advanced by the Property Tax Reform Committee appointed last year by outgoing Governor Jeb Bush. The Committee was created by executive fiat after the 2005 session of the Legislature did little to address the property tax inequities engendered by the Save Our Homes constitutional amendment approved by Florida voters in 1994.
__________________________________________________________________________________
Daniel A. Weiss is a former Attorney Special Master for the Miami-Dade County Value Adjustment Board with over 25 years property tax experience. Mr. Weiss represented the Miami-Dade County taxing authorities in litigation and appeals between 1981 and 1995 and has since represented taxpayers in property tax matters. Mr. Weiss was named one of the top lawyers in real estate, zoning and land use by South Florida Legal Guide 2007. In Florida Super Lawyers 2006, Weiss was named one of the top 6 local government lawyers in South Florida.
The homestead property tax "trap" is the phenomenon which gave rise to no less than three proposals in the 2005 legislative session for "portability" in whole or in part of accumulated Save Ours Homes "cap" benefits accrued on property.
The consequences of the Amendment 10 "cap" are so extreme as a result of 12 years of application since inception that some properties, especially in South Florida, have an assessed or taxable value of less than 1/3 of the fair market value. This means that two identical homes adjacent to each other can--and sometimes do--have tax bills with a 200% variation even though their values and tax (i.e. millage) rates are identical!
Cases in point include the following.
Eileen Rennick, a widow, moved to Century Village in Deerfield Beach in 1999. She became accustomed to paying $104 a year in taxes on a one-bedroom condominium unit. But two years ago, when she moved across the street into a two-bedroom condo unit, her taxes increased by 900%, to $1,040 a year. "It's outrageous," Rennick said, adding that she would not have moved if she had been aware of the dramatic impact of the change in property taxes.
Randy Aube of Boca Raton would like to move to Broward County, but he's afraid he can't afford the taxes. He pays $4,300 a year in property tax on the house he has lived in for six years. If he moves and buys a place of similar value, his property taxes will triple to $14,000.
Aube wrote in a recent letter to State Representative Adam Hasner (R., Delray Beach), "My next-door neighbor, who bought his house a few years after I did, is paying about twice as much [in property taxes]. That just doesn't make any sense. I know this is a huge complicated problem, but if it doesn't get fixed, it's only going to get worse."
Upset about the homestead exemption property tax "trap," South Florida homeowners can address their concerns directly to state legislators of both parties at town hall-type meetings across the state in the ensuing months. Eight town hall-style hearings are scheduled. See this blog for dates and times of hearings in Fort Lauderdale and Miami during the second week of February.
The hearings will provided grist for the legislative mill in the upcoming session, which will start in March.
Newly-elected Governor Charlie Crist and many legislators want to reduce taxes people pay on their homes. They are discussing a constitutional amendment that legislators would propose and voters approve or disapprove in statewide elections to be held as early as this summer. The proposal, among other things, would double the current $25,000 homestead exemption, which lowers the assessed and taxable value of a home. Under the existing exemption, the owner of a $200,000 house pays property tax on $175,000 of that value. If such a proposal passes, the taxable value would be reduced to $150,000.
The Republican governor also wants to let homeowners take some or all of their so-called "Save Our Homes" tax savings if they move. A 13-year-old constitutional provision caps tax increases at 3 percent a year (or the cost-of-living increase, whichever is less) no matter how much the value of a home increases. But those savings are lost when a homeowner moves, and the cap doesn't apply to businesses, rental properties or vacation homes.
This month, Crist and legislators concurred on changes to cut property insurance rates. Property tax issues promise to be hinkier and more controversial.
Local government officials say tax cuts of any significance will reduce public funds avalable for local parks, salaries of police officers and firefighters and other essential public services.
Lauderdale Lakes Finance Director Larry Tibbs is among those who are worried. He says if homestead exemptions are doubled, his city alone would lose more than $1 million annually. Mr. Tibbs said, "To make up that difference, Lauderdale Lakes would have to raise the millage rate."
Consequences would be even worse for Miami-Dade County municipalities which have a stable and predominant tax base of homes owned by permanent residents. North Miami and South Miami quickly come to mind.
Governor Crist cogently suggests that local governments, which have expanded their budgets during the past several years due to swollen tax bases resulting from a booming real estate market, should pull in their belts and spend less.
"They are going to have to have a little more discipline at the local level to help the people," said Governor Crist.
Some Republican legislators joined the chorus of those calling for spending cuts by cities, counties and other taxing authorities. They say total property taxes levied at the local level ascended from $16.6 billion in 2001 to $30.4 billion in 2006, an 83.1% increase that nearly septupled the 12% population growth during the same period.
"Florida doesn't have a revenue problem. We have a spending problem,"
said Senator Mike Haridopolous (R., Indialantic), chairman of the Senate Finance and Tax Committee.
Palm Beach County resident Larry Zalkin, who serves on a county advisory board, agrees that it's time for Florida to reduce property taxes, even if it means slashing city and county budgets. "This is the ideal time to fix the situation" by sharing budget surpluses with the public which funded them, opined Mr. Zalkin.
The property tax debate is gaining momentum after fizzling during the 2005 legislative session. State legislative leadership says everything is on the table, even though House Speaker Marco Rubio insists any tax cuts be across the board and be combined with stringent spending caps for cities, counties and school districts.
"[Property tax cuts] have to help the owner of the apartment building, so that hopefully they'll pass it through to their tenant. It also has to help the owner of the laundromat or the dry-cleaning store at the corner," said Rubio (R., West Miami).
For better or worse, watch for the 2006 legislative session to study all, and implement some, of the proposals advanced by the Property Tax Reform Committee appointed last year by outgoing Governor Jeb Bush. The Committee was created by executive fiat after the 2005 session of the Legislature did little to address the property tax inequities engendered by the Save Our Homes constitutional amendment approved by Florida voters in 1994.
__________________________________________________________________________________
Daniel A. Weiss is a former Attorney Special Master for the Miami-Dade County Value Adjustment Board with over 25 years property tax experience. Mr. Weiss represented the Miami-Dade County taxing authorities in litigation and appeals between 1981 and 1995 and has since represented taxpayers in property tax matters. Mr. Weiss was named one of the top lawyers in real estate, zoning and land use by South Florida Legal Guide 2007. In Florida Super Lawyers 2006, Weiss was named one of the top 6 local government lawyers in South Florida.
In Florida Trend magazine™'s Legal Elite's issue, July 2004, Mr. Weiss was selected by his peers as one of the top 30 government lawyers in the State of Florida.
For a free consultation regarding your property, contact us.
FLORIDA PROPERTY TAX NEWS: MARCH 1 IS HOMESTEAD EXEMPTION FILING DEADLINE!
MARCH 1st IS FLORIDA HOMESTEAD EXEMPTION DEADLINE
March 1 is the annual filing deadline for homestead property tax exemption in Florida.
Here are a few FAQs related to Florida's valuable homestead exemption from property taxation.
The Property Appraiser’s Office in each county administers property tax savings on residential properties that qualify for Florida’s $25,000 homestead exemption.
For example, if your home has an assessed value of $100,000, the homestead exemption reduces its taxable value to $75,000.
Further tax relief on homestead properties, such as up to $5,000 for qualified disabled veterans, or $500 for widows or widowers, may also apply to your residence.
An additional $25,000 exemption for qualified senior citizens is now in effect for county residents who meet an income-level eligibility.
A panoply of additional homestead-related exemptions are available to disabled veterans, those legally blind, quadriplegic, hemiplegic, paraplegic or totally and permanently disabled so as to require the use of a wheelchair for mobility. Some of these exemption wholly ELIMINATE property taxation on the residence, irrespective of its value.
Confer with your county Property Appraiser or local property tax consultant to determine whether you are eligible for any of these valuable benefits.
The deadline for all new applications for homestead and other exemptions is March 1 each year. This includes instituitional exemptions, such as charitable, religious, educational and scientific. agricultural classification applications must also be filed on or before March 1.
The Property Appraiser’s Office also administers Florida Constitution Amendment 10 — Florida’s 3% cap on qualified homestead properties.
Florida limits any increase in the assessed value of a qualified homestead property to 3 % or the Consumer Price Index, whichever is lower. The cap does not apply to commercial property. When a homestead property is sold, the value returns to market value as of the following January 1. New additions or improvements are assessed at market value on January 1 following the year of construction. Thereafter, they are included in the 3% cap.
This Save Our Homes (SOH) cap can become far more valuable over time. Some Florida homes which have been homestead-exempt since the 1995 SOH start date are now assessed at less than 50%--some significantly less tan 50%--of their market value. For owners of some luxury homes, actual tax savings may amount to $100,000 per year or more!
So don't make the mistake of thinking that the homestead exemption affords only relief against $25,000 in assessed valuation.
Any questions? Contact your County Property Appraiser. Click here for contact information.
http://dor.myflorida.com/dor/property/appraisers.html
To be sure you're doing the most you can to keep your property taxes as low as the law allows them to be, contact a Florida property tax professional, whether it's a lawyer, real estate broker, accountant or other experienced professional.
____________________________________________________
Daniel A. Weiss is a former Attorney Special Master for the Miami-Dade County Value Adjustment Board with over 25 years property tax experience. Mr. Weiss represented the Miami-Dade County taxing authorities in litigation and appeals between 1981 and 1995 and has since represented taxpayers in property tax matters. Mr. Weiss was named one of the top lawyers in real estate, zoning and land use by South Florida Legal Guide 2007. In Florida Super Lawyers 2006, Weiss was named one of the top 6 local government lawyers in South Florida.
March 1 is the annual filing deadline for homestead property tax exemption in Florida.
Here are a few FAQs related to Florida's valuable homestead exemption from property taxation.
The Property Appraiser’s Office in each county administers property tax savings on residential properties that qualify for Florida’s $25,000 homestead exemption.
For example, if your home has an assessed value of $100,000, the homestead exemption reduces its taxable value to $75,000.
Further tax relief on homestead properties, such as up to $5,000 for qualified disabled veterans, or $500 for widows or widowers, may also apply to your residence.
An additional $25,000 exemption for qualified senior citizens is now in effect for county residents who meet an income-level eligibility.
A panoply of additional homestead-related exemptions are available to disabled veterans, those legally blind, quadriplegic, hemiplegic, paraplegic or totally and permanently disabled so as to require the use of a wheelchair for mobility. Some of these exemption wholly ELIMINATE property taxation on the residence, irrespective of its value.
Confer with your county Property Appraiser or local property tax consultant to determine whether you are eligible for any of these valuable benefits.
The deadline for all new applications for homestead and other exemptions is March 1 each year. This includes instituitional exemptions, such as charitable, religious, educational and scientific. agricultural classification applications must also be filed on or before March 1.
The Property Appraiser’s Office also administers Florida Constitution Amendment 10 — Florida’s 3% cap on qualified homestead properties.
Florida limits any increase in the assessed value of a qualified homestead property to 3 % or the Consumer Price Index, whichever is lower. The cap does not apply to commercial property. When a homestead property is sold, the value returns to market value as of the following January 1. New additions or improvements are assessed at market value on January 1 following the year of construction. Thereafter, they are included in the 3% cap.
This Save Our Homes (SOH) cap can become far more valuable over time. Some Florida homes which have been homestead-exempt since the 1995 SOH start date are now assessed at less than 50%--some significantly less tan 50%--of their market value. For owners of some luxury homes, actual tax savings may amount to $100,000 per year or more!
So don't make the mistake of thinking that the homestead exemption affords only relief against $25,000 in assessed valuation.
Any questions? Contact your County Property Appraiser. Click here for contact information.
http://dor.myflorida.com/dor/property/appraisers.html
To be sure you're doing the most you can to keep your property taxes as low as the law allows them to be, contact a Florida property tax professional, whether it's a lawyer, real estate broker, accountant or other experienced professional.
____________________________________________________
Daniel A. Weiss is a former Attorney Special Master for the Miami-Dade County Value Adjustment Board with over 25 years property tax experience. Mr. Weiss represented the Miami-Dade County taxing authorities in litigation and appeals between 1981 and 1995 and has since represented taxpayers in property tax matters. Mr. Weiss was named one of the top lawyers in real estate, zoning and land use by South Florida Legal Guide 2007. In Florida Super Lawyers 2006, Weiss was named one of the top 6 local government lawyers in South Florida.
In Florida Trend magazine™'s Legal Elite's issue, July 2004, Mr. Weiss was selected by his peers as one of the top 30 government lawyers in the State of Florida.
For a free consultation regarding your property, contact us.
Subscribe to:
Posts (Atom)
Posts
