You might have heard some of the buzz surrounding Florida’s new legislation. We have broken it down in regards to what this means for you and what you need to start saving!
Last month, the people of Florida voted in overwhelming numbers to save nearly $10 billion in property taxes with the approval of Amendment
1. This tax relief is in addition to the $15 billion tax cut passed by the Florida Legislature in 2007. Together, they add up to almost $25 billion in property-tax cuts over five years for Florida homeowners and businesses. Citizens will gain the freedom to purchase a new home without huge tax penalties. Rental home owners, second home owners and businesses will benefit from limits on future tax increases. The amendment contains two provisions that we have long advocated: doubling the homestead exemption and the ability for Florida families to take with them their Save Our Homes tax savings. Specifically, the constitutional amendment: 1. Doubles the homestead exemption for almost all homeowners, providing an average savings of about $240 annually. The new exemption applies fully to homesteads valued over $75,000, and partially for homesteads valued between $50,000 and $75,000. This new exemption does not apply to school taxes.
2. Allows portability: The Governor has heard from many Floridians that they feel trapped in their homes. Portability allows homeowners to transfer their Save Our Homes tax benefits from their current home to a newly purchased home within any Florida county. Portability applies to homes purchased in 2007 and later, and the benefit is capped at $500,000.
3. Provides an assessment cap of 10 percent for all properties not previously capped: While homestead properties are already capped at three percent, now all other properties, including rental properties, second homes, and business properties, will be protected from huge tax increases. This new exemption does not apply to school taxes.
4. Creates a new $25,000 exemption for business property, including office furniture, computers, machinery and equipment.
What you should do to receive benefits of Amendment 1 On January 29, 2008, an overwhelming 64 percent of Florida voters helped change Florida’s property tax system. To receive some of the benefits of the changes enacted on January 29, certain homeowners must take action by March 1, 2008.
The Constitutional amendment created four new opportunities for taxpayers to obtain taxrelief:
1. Increased homestead exemption
2. Portability of “Save our Homes” benefit
3. $25,000 exemption for tangible personal property
4. 10 percent annual assessment cap for non-homestead property
What taxpayers must do to receive these new benefits:
1. Increased homestead exemption – Homeowners that are currently receiving the homestead exemption will automatically receive the increased homestead exemption. No action is necessary.
2. Portability of “Save our Homes” benefits – If you received the homestead exemption in 2007 on a home that you sold or otherwise abandoned during 2007 and have purchased a new home by January 1, 2008, you are eligible to take some or all of the benefit of “Save our Homes” to your new home. In order to receive this benefit, you must apply by March 1, 2008 to your property appraiser for your new homestead exemption and for the transfer of the “Save Our Homes” benefit to your new homestead for 2008.
3. $25,000 exemption for tangible personal property – Tangible personal property taxes apply only to certain taxpayers in Florida – typically businesses and certain owners of mobile homes. The tax does not apply to homesteaded property. In order to receive the $25,000 exemption for tangible personal property, taxpayers subject to the tax must file a tangible personal property return with their property appraiser by April 1, 2008.
4. 10 percent limit on annual assessment increases for non-homestead property – The 10 percent limitation does not apply until 2009. No application is necessary for 2008. Apply by March 1, 2008, to transfer your “Save Our Homes” benefit to your new home. The Florida homestead exemption “Save Our Homes” benefit is now “portable” because of the passage of the constitutional amendment on January 29, 2008. The “Save Our Homes” benefit is the difference between the assessed value and market value of a homestead property due to the annual limit on increases in assessed value. Portability means that, from now on, you can transfer some or all of your old home’s “Save Our Homes” benefit to your new home. You must apply to your property appraiser to transfer your “Save Our Homes” benefit. For contact information on Florida’s property appraisers, go to http://dor.myflorida.com/dor/property/appraisers.html.
Portability for 2008:
Portability first becomes available for homeowners who had a 2007 homestead exemption on their Former home and established a new homestead by January 1 ,2008. If you moved into a new home by January 1, 2008, you have through March 1, 2008, to apply to your property appraiser for your new homestead exemption and for the transfer of the “Save Our Homes” benefit to your new homestead for 2008. If you have already applied for a homestead exemption on your new home, you must complete a separate application by March 1, 2008, to transfer the “Save Our Homes” benefit to your new homestead.
Portability for 2009 and after:
If you move into a new home after January 1, 2008, and prior to January 1, 2009, and had a previous homestead exemption in either 2007 or 2008, you must apply for your 2009 homestead exemption and the transfer of your “Save Our Homes” benefit by March 1, 2009.
In future years, you will be able to transfer your “Save Our Homes” benefit to a new home if you had the homestead exemption on your old home in either of the two preceding years.
For information about how to receive these new benefits, please read below or visit the Department of Revenue’s Web site online at www.myflorida.com/dor. You may also wish to contact your local property appraiser’s office.
Also feel free to contact eThree Realty directly at 877-50-eThree to discuss how this may affect you with a real estate professional.