How property tax reform in Legislature will affect you
Posted April 20, 2007
Now comes the hard bargaining.
On Thursday, Florida's state senators, Republicans and Democrats, unanimously approved their proposal for overhauling the property tax system. Senators will now begin parleys with the House, which has embarked in a very different direction on taxes and is split along party lines. Both chambers are also scrutinizing ideas floated by Gov. Charlie Crist.
The goal is to seal a tax-cut deal by the end of May 4, when legislators are supposed to go home until next year. That may not be doable, but it's now clearer than ever what each tax plan would mean for various categories of Florida resident and property owners, including long-term homeowners, snowbirds and renters. Here is a rundown.
Current homeowners | First-time homebuyers | Homeowners seeking to move | Snowbirds | Renters and landlords | Business owners | Cities and counties
Current homeowners
HOUSE: The House plan would be a major boon because it calls for the elimination of property taxes on primary residences. Overall, property tax collections would drop 18 percent statewide, according to House estimates. The more a homeowner's property is worth, the more in taxes would be saved. The downside: The state sales tax could rise to as much as 8.5 cents on the dollar to replace lost revenue.
SENATE: Not as good for homeowners because property taxes on homes wouldn't be abolished but rolled back to 2005-06 levels. The Senate's plan would reduce property taxes by an estimated 12 percent statewide but include no sales tax increase.
CRIST: Supports doubling the homestead exemption available to year-round residents to $50,000.
First-time homebuyers
HOUSE: No specific breaks, but home ownership would become more affordable because of the elimination of property taxes on primary residences.
SENATE: A $50,000 homestead exemption if they buy a home valued at more than $100,000.
CRIST: No specific proposal.
Homeowners seeking to move
HOUSE: If the new property is a primary residence, it would be free of property taxes under the House proposal.
SENATE: Residents could transfer up to $500,000 of their current tax savings under the Save Our Homes amendment, which limits annual increases in property tax payments to 3 percent. But those benefits would be reduced, and in seven to eight years, the average homeowner who moved would pay the same taxes as a newcomer to Florida.
CRIST: Supports allowing Floridians to take their Save Our Homes tax-cap savings with them.
Snowbirds
HOUSE: Nonresidents get modest, unspecified tax relief, but more than the Senate offers.
SENATE: Tax bills would be trimmed slightly, by a yet-to-be-defined amount.
CRIST: No specific proposals.
Renters and landlords
HOUSE: Landlords would see greater savings than what the Senate is offering, but there are no guarantees renters would share in them. House leaders say they will try to guarantee some benefits to renters. Like the Senate's plan, the House proposal changes how commercial properties and affordable housing units are assessed for tax purposes, which means taxes might be reduced for those owners and their tenants.
SENATE: Landlords would enjoy modest tax savings that senators say could stave off rent increases. Also, owners of affordable housing units would see their properties assessed differently, potentially reducing their taxes and the rents charged tenants.
CRIST: No specific proposals.
Business owners
HOUSE: Provides a $25,000 tax break for business equipment.
SENATE: Eliminates tangible personal property taxes paid on the first $25,000 of equipment such as computers and desks. That would erase the tax for as many as 1 million of the 1.3 million commercial properties that now pay it.
CRIST: No specific property tax cut for businesses, but he supports sales-tax breaks for sectors such as the film industry.
Cities and counties
HOUSE: Scales back municipal tax rates to 2000-01 levels and pegs future increases to inflation.
SENATE: Starting in 2008, would roll local government tax rates back to 2005-06 levels. From that year forward, tax collections could not grow faster than the population and inflation rates.
CRIST: Would reduce local-government tax collections by doubling the state's homestead exemption and allowing homeowners to transfer their Save Our Homes tax cap savings to a new home.
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