Florida Income Tax Benefits & Proposed changes to Property Taxes

FLORIDA TAX BENEFITS

STATE INCOME TAX: Florida is one of only a handful of states that has NO state income tax!


• Proposition 1: On January 29, 2008 voters passed Proposition 1, a property tax measure making Florida one of the lowest taxed states in the nation. Here is a condensed explanation of current property tax laws and an additional law that is being proposed to the voters next month in the November 2008 election.

• Homestead Rule: If your Florida condo or home is your primary residence, you are entitled to a $50,000 Homestead deduction from the assessed value as determined by the property appraiser. Example: If you purchase a home that is assessed at $350,000 you will be taxed on $300,000

• Maximum Yearly Increase: If your primary residence (Homestead) appreciates during the year, property taxes can only increase by a maximum of 3%. Non-Homesteaded or investment property taxes cannot increase by more than 10%, regardless of how much the real estate market may rise during a strong market. Example: If real estate values decrease, your assessed value will decrease accordingly, whether you are Homesteaded or not. However, if the real estate market turns upward the next year by 20% or 30%, your tax assessment can only increase by 3% if Homesteaded, and 10% if it is not a Homestead.

• Portability: When you sell your primary residence, you may transfer the difference from the original assessed value and the sale price (up to $500,000). You then deduct that difference from the next property's assessed tax value if the new property is the same or greater value.

Example 1: You buy a Homesteaded property with an assessed value of $350,000. You later sell that home for $500,000. You have $150,000 in "Portability" that can be deducted from the value of your next residence. This is in addition to the $50,000 Homestead exemption. Say you purchase your "new" residence and it is assessed by the county appraiser at $600,000, you will only pay property taxes on $400,000!

Example 2: If you buy a home that is less expensive than the one you sold, and the old property increased in value, you may still apply a percentage formula to save on property taxes. For more details about Portability contact me, or visit the Lee County website at www.Leepa.org or the Collier County appraiser's site at www.Collierappraiser.com

PROPOSED PROPERTY TAX AMENDMENT

To be voted on in the November 2008 election and will be effective in January 2010.

If this proposal passes, all property taxes will decrease by approximately 25%.

Another nice feature of this proposal is that non-homesteaded property taxes could not increase by more than 5% in a year, as opposed to the current 10% maximum increase. This change will be very favorable to second homeowners, vacation homeowners and investors and increase the number of buyers coming into the market.

Garren Grup, REALTOR
Delivering Noteworthy Results in Naples!