Much Ado About Taxes

Property Tax Cuts in Florida

There has been a lot of buzz here in Florida over the last few weeks and specifically the last few days about property tax cuts, and for good reason. There has also been much speculation as to how the state legislators plan to provide some property tax relief to Florida property owners, but the proof is in the pudding.

The Florida State Legislature passed the largest property tax cut in state history on Thursday, which will apparently result over $31 Billion in tax cuts and saving the average taxpayer about 7% on their property taxes this year. Before we start jumping for joy, it's important to note that there's an amendment to the State's constitution involved, which won't happen until 2008.

In the area of immediate tax relief, cities and counties will be required to reduce their tax rates based on past history. This varies from municipality to municipality and is a bit much to explain in detail except that it should result in over $15 Billion in tax cuts over five years for all property types, including commercial and non-homestead properties. In short, cities and counties that increased their taxes dramatically between 2001 and 2006 will have to make the most dramatic cuts. The higher their increases during these periods, the more they're required to cut.

This provision starts immediately by making 2007-2008 taxes equal to the 2006-2007 rates, except for new construction. Future tax rate increases will be tied to the annual growth of Florida personal income so that rates maintain some semblance of fairness and logic.

The proposed $16 Billion constitutional amendment should be set before voters in January 2008. The amendment essentially does away with 'Save Our Homes' and replaces it with a 'super homestead exemption'. This SuperExemption apparently will exempt 75% of the first $200,000 of homestead value and 15% of the next $300,000 with everyone getting at least a $50,000 exemption. Folks who are currently protected by 'Save Our Homes' will apparently be given the option of keeping their current status or changing to the SuperExemption. Provisions for affordable housing, low-income seniors, and working waterfronts are also provided.

Property tax cuts are fantastic news for Florida property owners and may be just the impetus Florida's real estate market needs to kick-start the housing market once again.

We have already been receiving emails left and right from various real estate experts over the last few days about the positive impact these property tax cuts will have. Still other investment groups are compiling their cash in an effort to 'stock up' on the great deals that are presently on the market. Many first time home buyers and the thousands of folks moving to Florida each week area also on a buying spree in trying to take advantage of the unusual opportunities being offered by the market. Foreclosures, bankruptcies, rising adjustable mortgages, and motivated sellers continue to provide a wealth of deals for those who want them.

Suffice it to say, we're all pretty excited about the possibilities for future growth and expansion for our economy. Of course, there are concerns about where the tax cuts will impact Floridians most including education and services like fire-rescue, but we'll see these things shake out in coming months. We'll continue to post information as it becomes available.

There are a number of articles in the Miami Herald. If you would like direct links to some of the articles, just drop us a line.

As always, thank you for the opportunity to earn your business.

All the best,

--Branon A. Edwards
Licensed Real Estate Broker and Mortgage Broker
786-417-4910 Direct Phone
786-524-5747 Direct Fax
Branon@InvestFloridaRealty.com
http://www.InvestFloridaRealty.com

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Saint James City, FL 33956 USA

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