Realty Blog

Tallahassee - Lawmakers appear close to a new agreement for cutting property taxes that would include doubling the $25,000 homestead exemption and offering homeowner's "portability" of their accrued Save Our Homes tax savings, top legislators and the governor said Monday.

The new plan would total $7.6 billion in property tax cuts over the first five years, rather than as mush as $16 billion expected from a proposed super homestead exemption constitutional amendment question from the Jan. 29th ballot, lawmakers and Gov. Charlie Crist have been forced to decide whether to replace the super exemption question o the ballot or fight the judge's decision in appellate court.

Crist said another property tax session would take place "soon" before the Oct. 31st deadline lawmakers face to put a new proposal on the Jan. 29th presidential primary ballot. Lawmakers can place questions on ballots no less than 90 days prior to the election in question.

Top Capital leaders said privately that the fourth special session of the year, or even an extension of the ongoing session to cut the budget, could begin Friday and wrap up by Monday.

The new plan would give Crist two solutions that he campaigned for last year, doubling the homestead exemption and portability.

"In some form or fashion virtually everyone's embraced it, "Crist said, but then added: "The caveat I have is: in some form or fashion."

The forms that seem most likely:

Doubling the $25,000 homestead exemption to $50,000 for local governments, but not for school districts. The second $25,000 exemption would apply to the $50,000-$75,000 increment of property value, not the $25,000-$50,000 piece, so that homesteads worth less than $50,000 would have to pay come county and city property taxes. Homesteads would pay school district property taxes on all but $25,000 of their value. This would account for about $4 billion in tax cuts over five years.

Letting homeowners take their accrued Save Our Homes benefit with them to a new home, but then allowing the new home's assessed value to increase at 8 percent a year until it reaches the value it would have been assessed at under the actual sale price and the Save Our Homes cap. From that point forward, assessment increases again would be limited to the lesser of 3 percent or inflation.

That would mean a tax savings for seven years for someone with $100,000 in accrued Save Our Homes savings who buys a $400,000 home. Under the new plan, the assessed value of the new home would be set at $300,000 and would grow at 8 percent a year until the eighth year, when the assessed value would be $514,147. That's the fist year the assessed value would be greater than $400,000 growing at 3 percent a year, or $491,950.

This part of the plan would account for $3.6 billion of the five-year tax cut.

PB Post