Palm Beach County Appraiser Urges Portable Property Taxes For Current Homeowners

Palm Beach County Property Appraiser Gary Nikolits is worried about the area’s housing industry if serious property tax reform is not enacted, reports the Sun-Sentinel.

Speaking in front of about 100 real estate agents during a seminar at HomeBanc Mortgage Corp. in Palm Beach Gardens, Nikolits said he supports state legislation that would prevent sellers from incurring huge new tax bills when they switch homes. He urged that the South Florida real estate industry could be “brought to its knees” if homeowners aren’t allowed a property tax break with them when they move.

“We’re going to reach a point where people are not going to be able to afford to move,” Nikolits said.

Many residents already feel that way, saying they can’t afford to move up or even downsize because of the higher taxes they would incur on their new properties. It’s a reason often cited for the recent South Florida housing market slowdown. Homeowners currently receive a $25,000 Florida homestead exemption, while the Save Our Homes amendment, circa 1992, limits the rise in taxable value on homes to 3 percent per year.

• Once residents move, however, they lose that 3 percent benefit.
• Florida real estate is subject to reassessment every time it changes hands.

Legislators are trying to combat this problem. Bills allowing homesteaded property owners to transfer their Save Our Homes tax break when they move are currently under debate. Carl Domino, a Republican from Jupiter and a proponent of the measure, is pushing for no limits on the portable tax savings, which owners could take with them wherever they move in the state.

“It’ll put people into more of a buying-and-selling mode,” he said.

Nikolits said he would like to see a cap of $250,000 so wealthy homeowners don’t get out of having to pay their fair share of taxes. There are 3,680 homes in Palm Beach County with Save Our Homes tax savings of $500,000 or more, according to the appraiser’s office. Nikolits also thinks portability should be restricted to a homeowner moving within the same county, an idea Broward County Property Appraiser Lori Parrish agreed with.

“We could devastate a small community if it were to go statewide,” said Parrish, who supports portability but thinks counties should decide individually how best to institute it.

Mike Kleinrichert, a real estate agent from Wellington who attended the seminar where Nikolits spoke, said at least a third of his listings are from people who want to move out of the state, in part because of rising Florida property taxes. Naturally, portability would be beneficial to his business and clients. If you are considering a Florida Home Loan, keep an eye on the situation to see how the tax reform could benefit you.