Saving Our Homes Again … A Better Way This Time
By popular demand, the Florida legislature has finally put together a package that should alleviate the huge differences in taxes caused by the Save Our Homes amendment to Florida’s Constitution.
Save Our Homes, the cap on increases in assessed value for homesteads, didn’t anticipate the problems caused by its formula. Many of the ideas floated in the past year would likely have continued that problem, especially for buyers of homes who start out being taxed at nearly full market value while many neighbors are taxed on far less.
But the proposed changes, which must be ratified by Florida voters in January 2008, are a step toward a fairer system. A home buyer could be eligible for up to a $195,000 deduction in the first year of ownership. Low income seniors could get an extra $50,000 deduction. That will really make a difference!
By making taxes fairer, it’s easier for home sellers to find a willing and ready buyer from in the state or out of state, and easier for homeowners to move. Many buyers had removed themselves from today’s market because of high taxes.
If you’re wondering how the changes may affect your home, try my taxable value charting calculator. You can enter your current Property Appraiser market value and assessed value, and see what your taxable value is with different average annual property appreciation rates. Compare the new plan with the current Save Our Homes and homestead exemption.
I’m hoping the tax changes will also help our county and local governments be more fiscally responsible. During the first half of the decade they increased their budgets while homesteaded owners felt no effect thanks to the Save Our Homes exemption. The non-homesteaded owners bore the brunt of these budget increases, and then more recently, buyers also were forced to carry that burden. It was a contributing factor to the changing market in 2006 as buyers sat on the fence. Now we have an opportunity for a market correction, and this spells relief for buyers and sellers alike.