Palm Beach County: New Budget, Old Property Tax/Affordable Housing Problems

Those in the Palm Beach housing market are hoping that a new budget has a positive effect on affordable housing issues in the area, but many remain pessimistic.

Yesterday, commissioners endorsed a 16 percent increase in property tax revenue and advised about 20 residents who came to complain to look to Tallahassee for relief. These officials made no last-minute changes to the property tax rate, however, settling on $4.28 per $1,000 in assessed value, a four percent reduction.

Despite the rate reduction, commissioners will take in $110 million more in property taxes in 2007 than they did this year. Soaring property values fueled such growth.

Affect of taxes on Florida home mortgage demand

Residents, real estate agents and civic and political leaders complained about the growing tax burden being felt by new homebuyers and people who aren’t protected by the state’s homestead laws. It’s had a negative effect, for certain, on those thinking about a Florida home mortgage.

Sherry Lee, a self-described unemployed real estate broker, blamed taxes for the county’s lack of affordable housing.

“If I go out and try to buy a $400,000 house and put 20 percent down, my [Florida mortgage loan] payment is going to be the same as my taxes and insurance,” said Lee, of Jupiter. “That’s why they aren’t buying. You need to look at your tax burden.”

Commissioners cited the 1992 Save Our Homes constitutional amendment as the culprit. That amendment caps increases in the taxable value of residences with a homestead exemption, leaving commercial property owners, renters and snowbirds to pay a bigger share.

“We have a Save Our Homes amendment that was voted on by the public,” Commissioner Burt Aaronson said. “Are there inequities in it? Absolutely. “I think the people out there who are complaining, they should sit down with their legislators, who are the ones that go to Tallahassee and make the rules.”

Commissioner Warren Newell said, “We don’t have system that is fair to all the people. That’s what we’ve been saying up here.”

The county’s bulked-up $4.3 billion budget for fiscal 2007, which starts Oct. 1, is expected to be the last one boosted by the South Florida real estate boom of the last few years.