by Michele Newbern Gillis
Staff Writer
John Sebree, vice president of public policy for the Florida Association of Realtors, can now breathe a sigh of relief - the legislature passed the new property tax law, and now he has the task of explaining it to everyone and seeing what happens now.
“I don’t think it has sunk in yet,” said Sebree. “It was such an uphill battle and no one thought that we could do this. I think we proved everyone wrong. When we put our heads together and our hands together we can really make a difference.
“We knew we were up against huge odds. You seldom read in a newspaper that this amendment had a shot. Everyone wanted to tell you how it was going to cost cities, counties, police officers, firefighters and schools so much money and we knew that wasn’t that case.”
The reason for the law was to encourage people to buy houses, thereby causing a ripple effect in the real estate market. Sebree said the legislature had to have a special session to cut $1 billion from the state budget because Realtors aren’t selling homes.
“There was no documentary stamp revenue,” he said. “There was no sales tax revenue from people buying those houses going out and buying new refrigerators and stoves.
Finally, people are starting to see the ripple effect a positive real estate market or a not-so-positive real estate market can have on the entire economy and we knew that we needed a strong real estate market for this economy to bounce back.”
Sebree said many people didn’t even know what “portability” was until a few months ago and until recently many were locked into their homes and weren’t moving.
“If our studies are correct, they show that 60 percent of people move within the same geographic region,” he said. “Well, if I’m sitting here in my house and I get a new job across town, before the new law I’m probably not going to move across town like I might have previously because my taxes are going to be so much more. I’m going to just stay put.
“The same is true for empty nesters who want to downsize into a condominium. We realized that portability would be huge for this market if we could unlock 60 percent of that potential out there and you could start selling those houses again.”
Since portability is retroactive to January 2007, Sebree recommended that the Realtors and call all of their clients who sold a homesteaded property in 2007 and bought a homesteaded property since -their taxes are going to be recalculated.
“That’s a big deal,” he said. “Then again, it’s good for two years. Meaning maybe they sold last year or are going to sell next month. They have two years to identify and move into the new property. So, they don’t lose it and there’s not that pressure. There are a lot of interesting things about portability and, as more people hear about it, they will get excited about it.”
Even if a homeowner stays put, they will benefit from the new law.
“For those people who are staying in their homes, their taxes will be recalculated with the new homestead exemption,” he said. “So it is good for those people who are doing nothing as well.”
The doubling of the homestead exemption went into effect as soon as it passed and property taxes will be recalculated immediately.
But all four parts of the bill have different effective dates and Sebree said this good.
“There is a reason for that,” he said. “The 10 percent assessment cap on non-homesteaded properties will hopefully not kick in until after values have fallen the way we have expected them to fall in the past year or so. We are not going to be locked in at the highest level where property values were. This will start in 2009. There’s already a bill introduced in the regular session that would lower that 10 percent cap to five percent cap. You will see additional activity on that front.”
What the law does
Double homestead exemption: provides an additional exemption up to $25,000 off the assessed value of property valued above $50,000. This additional exemption applies to all tax levies except school districts. If you already have a homestead exemption, you do not need to apply for the additional exemption.
Portability: allows homesteaded property owners to transfer a portion of their ‘Save Our Homes’ benefit to a new homestead.
Limit on non-homesteaded assessments: provides for a cap on annual increase in the assessed value of non-homesteaded property at 10 percent. (applies to all tax levies except school districts).
TPP exemption: provides a $25,000 exemption on tangible personal property for businesses.
Source: Duval County Property Appraiser