Realty Blog

The Special Session began yesterday and bills were finally released for the first time outlining a basic agreement between Senate and House Republican Leadership on tax reform. We are analyzing the proposals, HB 1B and HB 3B, and working on a "pros and cons" document of the plan that we will share with you as soon as possible. We want everyone to be fully informed prior to a call-to-action.

The attached documents are newly released and help to explain the plan in detail. A quick summary is that the plan does away with the current system of Save Our Homes (SOH), replacing it with a "super-homestead" exemption. If you have a greater benefit under the current SOH system, you would be grandfathered in and retain that benefit until you sell.

The new "super-homestead" exemption would exempt 75 percent of a home's value up to $200,000 and 15 percent of a home's value up to $500,000, for a maximum homestead exemption of $195,000. The minimum homestead exemption would be raised to $50,000. The $500,000 threshold would increase by personal income growth so as to keep up with inflation and allow for greater amounts - and would also be allowed to be increased by a 2/3 vote of the Legislature. This new "super-homestead" exemption would apply to school property taxes as well, which is why some legislators do not approve of the measure.

As for Non-homesteaded property, the savings come from the statutory rollback to 2006 tax collections, PLUS a minimum 3 percent reduction in ALL taxes except schools. If your local government has been less fiscally responsible over the last 5 years, their percentage reduction is greater (up to 9 percent). Please see the attachment titled "County Roll Back Groups" to see where Palm Beach County lies.

The plan also seeks authority from the voters next January to address assessment method changes for affordable housing and working waterfront properties. Local governments' overall property tax revenue would also be capped starting next year, so that overall increases in property taxes will be held in check. However, all of these rollbacks and caps can be overridden by an extraordinary vote of the governing body, but in extreme cases will need voter approval.

Also important to Realtors and other businesses is the $25,000 exemption for tangible personal property that has been agreed to as part of the plan. This will result in approximately 1 million of Florida's 1.3 million businesses not having to even file this tax, and realize savings of about $500.00 for those who do.

This is the basics of the tax plan which will likely change over the next few days. We will update the membership when new information is released.