Florida Mortgage Brokers, Lenders, Realtors Join Fight For Tax Changes
The powerful housing industry is hoping state lawmakers’ bid to revise property taxes will inject life into the anemic Florida housing market, according to the Miami Herald.
In the short term, uncertainty about what shape property tax relief might take is keeping buyers on the fence and adding to inertia in a market that sizzled for five straight years but has turned tepid for 15 months.
Realtors, home builders and Florida mortgage lender groups all contend that significant property tax reductions are necessary to jump-start the market. On Tuesday, they joined a rally in Tallahassee pushing for steep cuts.
“This is the single biggest issue in the home-building industry right now,” said Silvio Cardoso, president of the South Florida builders’ organization. “Property taxes are strangling the market.”
Single-family home sales have plunged more than 20 percent over the past year in Miami-Dade and Broward County, as the number of homes up for sale has hit a new high.
At the current pace, it would take two years to sell all the single-family houses on the market and nearly three years to sell the condominiums.
To be sure, overbuilding, rampant speculation, lack of affordable Florida mortgages, rising adjustable rates and the high cost and scarcity of hurricane insurance all play a role in the downturn.
But Florida is suffering from an added drag of skyrocketing property taxes, which are making it too costly for many people to buy a first home - or to move to a different home.
“It’s a huge hurdle,” said developer Henry Harper, a downtown Miami condo builder. “We have lost buyers when they learned the cost of the property taxes and maintenance fees.”
Some Realtors, lenders and mortgage brokers alike say the uncertainty is causing a further chill in a market that could definitely use a warming up.
Bernie Navarro, a manager for Countrywide Mortgage in Southwest Miami-Dade, raised $6,000 for Floridians for Property Tax Reform, a non-profit coalition of concerned citizens and executives. The reason, he says, is that he doesn’t want politicians alone deciding the issue.
“We need to be at the forefront of this, said Navarro.
In 1995, the Save Our Homes provision, which sought to shield homeowners from high property taxes, was enacted.
The measure, which caps property assessment increases on primary residences at 3 percent a year, has protected longtime homeowners from the bite of big tax increases. But it has locked many people in their current homes - when a home is bought or sold, the assessment is reset at fair market value.
“It doesn’t behoove any Floridian to move,” said Greg Hallam, president of the Mortgage Bankers Association of Florida. “Even if we downsize, our taxes would go up. And there’s no benefit to upgrading your housing, because you’re really going to get hit by the tax increase.”
Save Our Homes also shifts the tax burden to recent buyers and those who aren’t eligible for the cap, such as seasonal residents.
So far, lawmakers haven’t proposed a special election to put the issue on the ballot this year. That means any eventual revisions might not be considered by voters until the November 2008 election.
Hallam says his group isn’t pushing a specific proposal but supports any of the various efforts that will ease the property tax burden.
Eric Prutsman, Mortgage Bankers Association lobbyist, says a variety of the proposals - including rolling back property taxes, increasing the homestead exemption and enacting “portability” so homeowners can carry tax savings with them to a new property - would boost sales.
“The good news is it looks like a rollback of some sort is coming,” Prutsman said.
Still, many builders reacted coolly to a Senate proposal of rolling back taxes to 2005 levels, since home prices were already high by then. With Florida mortgage rates still low, buying activity hasn’t risen. Will an alteration to the tax system really have an impact?
SOURCE: Miami Herald
