Changes to Homestead, Propery Taxes Close to Passing

The issue of homestead property taxes continues to remain controversial within the Florida home loan market. Lawmakers have been advancing proposals to make homestead tax assessment caps portable, but with restrictions.

For more than a decade, Florida homesteaders have been protected from increases to the assessed value of their homes. In the state’s supercharged real estate industry, the maximum annual three-percent increase of the Save Our Homes amendment can shelter hundreds of thousands of dollars from taxation and save homeowners thousands of dollars in taxes.

In 2004, Save Our Homes statewide shielded $165 billion in assessed value from taxation.

The issue of new Florida home loans

But for those who sell their homes and buy another, values are set at current market values. Bills in the House and Senate want to unlock the ”golden handcuffs” of Save Our Homes with a proposed amendment for voters to decide in November.

For three years, Rep. Carl Domino’s bill to make assessment caps portable has been blocked. Rep. Fred Brummer, chairman of the House Tax & Finance Committee, has been its most vocal opponent, saying Save Our Homes gives preferential treatment to wealthy homeowners, a situation he says portability would exacerbate.

On Friday, the committee passed out a bill that would allow $100,000 assessment-protection portability. It would also cap all differentials - the separation of assessed value and market value - at $100,000 more than what’s protected as of Jan. 1, 2007. The bill also restricts portability to homes sold and bought within the same county.

Brummer’s proposal also doubles the homestead exemption to $50,000 over 10 years.

”Any tax policy must contain some fairness. Save Our Homes has removed all fairness from property taxation,” said Brummer, an Apopka Republican.

Domino, a Jupiter Republican, said Brummer’s bill goes against portability. He offered three amendments to strip restrictions and all failed.

”At the end of the day, I think this is a bill that’s false,” Domino said. ”It doesn’t do anything it says it does.”

Sen. Mike Haridopolos, an Indialantic Republican, said he expected his Senate bill to limit assessment protection at $250,000 for property switches that are upgrades. Voters, Haridopolos said, will have something to vote on in November. It will affect the outlook on the Florida home loan they apply for.