Proposed Ft. Lauderdale Property Tax Plan Would Provide Relief For Homestead Properties

Half of Fort Lauderdale’s property owners would see a slight drop in property taxes — while the other half would experience a sharp increase — under the new budget proposed by the city manager that is set to be unveiled this week, the Sun-Sentinel reports.

City Manager George Gretsas proposes that the city cash in again on major increases in real estate values by bringing in an extra $18 million in tax collections to help support the citywide spending plan, currently slated for $503.5 million overall.

The 13 percent increase in expected property tax collections, bumping them to $133.4 million, would be assumed by only half of the city’s property owners — those who own seasonal homes, rental units, industrial space or commercial real estate, and those with new properties on the tax rolls.

The rest of the property owners, or 50.1 percent of them, are protected by Save Our Homes, a state constitutional amendment that limits tax increases on a person’s primary residence. Those owners would actually see a slight reduction in taxes under the city’s proposed budget.

Gretsas said he’s trying to maintain a slow, steady approach to taxing and spending in Fort Lauderdale, Broward’s biggest housing market, and one which only three years ago almost ran out of money. He believes that drastic changes, however tempting, end up creating instability. Gretsas emphasized his budget’s proposed 4 percent reduction in the mill rate, to $5.23 per $1,000 of taxable value, because it would bring financial relief to permanent, homesteaded residents.

The city’s property values increased some 19.5 percent this year as the South Florida housing market boom continued throughout most of 2005. The proposed tax rate takes this into account, and generates an increase for almost half the city’s property owners who can’t claim a homestead exemption under Florida law.

Part of the reason for the increase is to pump money into the government’s coffers now, before the market starts to slide. Analysts agree that there are some leaner years ahead for the market, especially with Florida home loan costs rising slowly and inventory swelling. City planners worry that the windfall of tax dollars could run dry as huge increases in property values cease, and are trying to plan ahead for that possibility now.