Well, there’s good news and bad news.  Good news first.   We’ve got a property tax relief plan on the presidential primary ballot.  Bad news.  It is a much leaner version of the one we wanted.

The scoop.

The original plan (passed by the House):

• Preserves Save Our Homes.
• Allows “portability” of accumulated Save Our Homes (SOH) benefits.
  • Homeowners may transfer their SOH benefit to a new homestead anywhere in Florida within 2 years of leaving their former homestead
  • If “upsizing” to a home of equal or greater just value, the homestead owner can transfer 100% of the SOH benefit to the new homestead, up to a $1 million transferred benefit.
  • If “downsizing” to a home with a lower just value, the homestead owner can transfer a SOH benefit that that protects the same percentage of value as it did the former homestead, up to a $1 million benefit.
• Provides a “Guaranteed Save Our Homes Benefit” for all homestead properties, so that all homestead owners can enjoy meaningful SOH savings without having to wait years to get them (does not apply to school tax levies).
  • All homeowners will own a SOH benefit that will accumulate on an annual basis and that can be carried with them from home to home (the “accumulated SOH benefit”).
  • If a homeowner has a small accumulated SOH benefit (like most recent homebuyers or new homestead buyers) they will receive a guaranteed exemption equal to 40% (or 100% for low-income seniors) of the county’s median just value for homesteads.
  • This is called the “Guaranteed SOH Benefit.” The Guaranteed SOH Benefit applies to home value above $50,000.
  • Along with using the county median home value approach, this will minimize the impact on small cities and counties. The homeowner will continue to build an accumulated SOH benefit. Once the accumulated SOH benefit is greater than the guaranteed benefit, the homeowner will receive the accumulated SOH benefit.
• Provides a 5% assessment cap for all non-homestead and commercial properties in Florida to guarantee property tax predictability and protection for all property owners.
  • Non-commercial properties will be reassessed at change of ownership.
  • Non-homestead properties will be reassessed when the property undergoes a substantial modification or change of use.
• Creates a new Tangible Personal Property Exemption of $25,000.
• Provides for limitations on assessed values of properties used for affordable housing and working waterfronts (does not apply to school tax levies).
• Instills accountability for all local property appraisers by requiring every appraiser to be elected.

The Senate passed their amended version of the property tax reform bill at the end of the day Monday, the day of the deadline to get it on the January ballot.  The official release as from Florida District 6 Representative Jimmy Patronis:

 Greetings,

As you know, providing meaningful property tax relief to Floridians has been one of my top priorities this year.

When the House started fighting for property tax relief over ten months ago, we realized this issue was one of the most important issues we would face.  We have worked hard to help make Florida affordable again for homeowners, families and small businesses.  We understand the need to provide tax relief and re-energize our economy in order to return Florida to its role as a national economic leader.

Last week the House passed a broad, bi-partisan consensus property tax relief plan 108-2.  The elements of the plan we passed were meaningful, balanced and returned some fairness and equity to Florida’s property tax system.

Sadly, the Senate rejected that plan, passed a plan with much less savings, and left us with no other option on the last day of the special session.  This plan was the most meaningful tax relief plan the Senate was willing to pass, and they made it clear to us it was their final offer, take it or leave it.

The reality of the legislative process requires agreement from both the House and the Senate.  The House has a long history of wanting to provide more meaningful tax relief. We have a record that demonstrates our continued commitment to providing greater relief.  The House is willing to do more if given the opportunity, but the Senate has not given us that option.

Sadly, if Floridians are to have a chance to vote for property tax relief in January, this plan is the only option.

Let me be clear, there are some positive elements for taxpayers in this package – things that Floridians have told us they wanted and the Governor campaigned on:

* Expanding the Homestead Exemption: Every homeowner will see a larger Homestead Exemption on their non-school taxes.  This will result in savings for every homestead property owner in the state.

* Full Portability: A universally agreed upon aspect of the plan.  Almost every Florida homeowner will now be able to carry their full current Save Our Homes savings with them to a new home.  Floridians will no longer be trapped in their homes and will be able to afford to move again.  This is a major step forward for Floridians.

* Cap on Assessments for Non-Homesteaded Properties: Just a week ago, the Senate was saying “NO” to any cap on non-homesteaded and business properties.  Florida property owners who have seen their property assessments double and triple in a single year will now benefit from a cap on at least some of their property assessments for non-education taxes.

The bottom line, however, is the Senate plan passed today does not go nearly far enough.  The people of Florida deserve more relief and we believe our partners in this process have missed a major opportunity to provide truly meaningful relief to all Floridians and to reinvigorate our state’s economy.

But this is not the end of the debate to reduce property taxes.

Our dedication to fighting for property tax relief continues.  We will not lose sight of the fact that these tax cuts are a small step toward getting Florida’s economy back on track.  It’s the people’s money, and we will keep fighting to let them keep more of it.

I encourage you to stay engaged on this issue and to continue communicating with your elected officials on the issues important to you.

This week The House passed an $11 billion property tax relief plan that will “preserve Save Our Homes, ensure portability of accumulated Save Our Homes benefits, it will cap year-to-year increases on non-homestead and commercial properties, and provide all homestead property owners a Guaranteed Save Our Homes benefit.” Full release as from Florida House District 6, Representative Jimmy Patronis:

HOUSE PASSES $11 BILLION PROPERTY TAX RELIEF PLAN WITH STRONG BI-PARTISAN SUPPORT

TALLAHASSEE – A bi-partisan coalition of Republican and Democratic lawmakers in the Florida House overwhelmingly supported an improved property tax reform plan today expected to provide over $11 billion dollars in property tax relief during the next four years. The measure (CS/SJR 2D) passed by a 108 to 2 vote.

The plan preserves Save Our Homes, ensures portability of accumulated Save Our Homes benefits, caps year-to-year increases on non-homestead and commercial properties, and provides all homestead property owners a Guaranteed Save Our Homes benefit. If approved by the Senate, the measure will once again give Floridians the opportunity to vote for meaningful property tax reform on January 29, 2008.

“The plan we passed today accomplishes is a strong step forward for property tax relief,” said Chairman Dean Cannon (R-Winter Park), the lead property tax negotiator in the Florida House. “It provides meaningful relief to Floridians suffering under the weight of oppressive taxes, it reforms a broken property tax system that is riddled with inequities, and it creates new protections for all property owners from unchecked property tax hikes in the future.”

“The revised approach passed today addresses the concerns we heard last week from Senators and Representatives of both parties,” said Majority Leader Adam Hasner (R-Delray Beach). “It’s a bi-partisan approach that is a significant improvement over the original plan – it delivers the same amount of relief but in a more efficient manner.”

The measure passed today:

• Preserves Save Our Homes.
• Allows “portability” of accumulated Save Our Homes (SOH) benefits.
  • Homeowners may transfer their SOH benefit to a new homestead anywhere in Florida within 2 years of leaving their former homestead
  • If “upsizing” to a home of equal or greater just value, the homestead owner can transfer 100% of the SOH benefit to the new homestead, up to a $1 million transferred benefit.
  • If “downsizing” to a home with a lower just value, the homestead owner can transfer a SOH benefit that that protects the same percentage of value as it did the former homestead, up to a $1 million benefit.
• Provides a “Guaranteed Save Our Homes Benefit” for all homestead properties, so that all homestead owners can enjoy meaningful SOH savings without having to wait years to get them (does not apply to school tax levies).
  • All homeowners will own a SOH benefit that will accumulate on an annual basis and that can be carried with them from home to home (the “accumulated SOH benefit”).
  • If a homeowner has a small accumulated SOH benefit (like most recent homebuyers or new homestead buyers) they will receive a guaranteed exemption equal to 40% (or 100% for low-income seniors) of the county’s median just value for homesteads.
  • This is called the “Guaranteed SOH Benefit.” The Guaranteed SOH Benefit applies to home value above $50,000.
  • Along with using the county median home value approach, this will minimize the impact on small cities and counties. The homeowner will continue to build an accumulated SOH benefit. Once the accumulated SOH benefit is greater than the guaranteed benefit, the homeowner will receive the accumulated SOH benefit.
• Provides a 5% assessment cap for all non-homestead and commercial properties in Florida to guarantee property tax predictability and protection for all property owners.
  • Non-commercial properties will be reassessed at change of ownership.
  • Non-homestead properties will be reassessed when the property undergoes a substantial modification or change of use.
• Creates a new Tangible Personal Property Exemption of $25,000.
• Provides for limitations on assessed values of properties used for affordable housing and working waterfronts (does not apply to school tax levies).
• Instills accountability for all local property appraisers by requiring every appraiser to be elected.

The deadline for getting the proposal on January 29th primary ballot is Tuesday, 10/30/2007 with the Senate to meet on the topic on Monday.

The current tax issues are a hot topic, and rightfully so. I’ve had numerous comments and emails regarding the tax increases over the last couple of years and I decided to dedicate a post to all those who have sent in emails regarding this issue.

We are an out of state owner of a condo on the beach.The VALUE of our property has doubled! Great but there is no way if we tried to sell it would go for that.  It has doubled the taxes.  Our tax should be based  on what we PAID for the condo NOT what the tax office thinks it is worth. If it sells for the assessed amount the new buyer should pay that amount.  If they think it is worth so much than come on and buy it!

Wesley

 

The “Mass” appraisal system does not work well when market conditions are so volatile. It works best in a market where changes are slower and gradual. Historically, the county offices have not needed to utilize the tools and data sources that could be very helpful in determining market/assessed values for ad-valorem tax purposes during these volatile times. Eliminating transactions that are not indicative of the current market [i.e., recorded deeds from sales contracts that took place 2+- yrs ago], applying financial feasibility to certain types of commercial transactions, and identifying and applying adjustments for market trends are a few tools / methods which could be helpful. Perhaps some changes will be made to the “Mass Appraisal System” that will incorporate the tools and data needed in times like this. The BCPA’s office has a tremendous task to complete, given the number of parcels, market conditions, and system limitations. Sure, it isn’t perfect, and that’s why the VAB is in place. Remember that government wheels move slowly but hopefully we will see some positive changes come from this situation.      

Donald J Giles, MAI, SRA
Giles Appraisal Group, Inc.

Last year I was told by the tax commissioner they valued all beach front property at $25,000 per front foot plus all construction at $200.00 per SF.  They did not consider location, lot depth, sewer availability, relativity to costal control line, zoning, height restrictions, or if the property could be rebuilt if it were destroyed.  Cost of construction had no bearing because they valued all construction at $200.00/sf.   Recent market sales were immaterial and they were not required to use them in their valuations. 

I was also told that appeals were useless because the Appeals Board never over ruled their numbers. 

This is our government at work.  I think the work and “eye candy” the politicians throw out regarding lowering the milliage rate assumes everyone is an idiot.  We all know the milliage rate has almost nothing to do with the tax bill compared to the erroneous valuations placed by the Tax Commissioner.   I think we would all be hard pressed to find one person in Bay County that is convinced property values have increased in  the past year.  However, our Tax Commissioner thinks he can make the population believe property values have increased.   I think it is time to get a Tax Commissioner with some common sense. 

Hugh Scott

When I spoke with the Appraiser’s office, it was my understanding that the annual property tax is based on similar local property for only one year, the past year and that the way it is computed is set by the state legislature.  So, one factor that would help mitigate the impact of a real estate bubble on property taxes would be to use multiple years such as the past 3 or 5 or 10 instead of just one year. 

        I think several factors will be required to manage the property tax rates to something reasonable such as:

1. use 3 to 10 years of past date instead of just one year;
2. adjust the mileage rate;
3. put a cap on the percentage increase allowed from one year to the next;
4. other ?

Barbara

Many months ago, Lee Sullivan and the Bay County Tax Watch, posted a chart in the News Herald outlining the “Actual Tax Levied” vs “Fair Tax” for calendar years 2001 thru 2006.  I don’t know how many people actually paid attention to that chart –  but, it was , perhaps, the most telling piece of paper I’d seen in a very long time.  

Simply put – as our assessments kept growing – our elected officials did NOTHING to curb their spending habits.  It’s PRETTY MUCH that simple. 

Our millage rates remained constant from 2001 thru 2005 EVEN THOUGH OUR TAXES ROSE FROM $37.4M TO $70.0M during that same time … that’s a $36M tax increase!!!  Almost 100%!!!  Nothing changed until 2006, when their constituents (us pee-ons) became extremely vocal … when Bay Tax Watch was formed; and, when projected new taxes were discussed for 2006 – AGAIN to be raised!!  It was only then that our county commissioners were nice enough to lower our millage rate by, what, 1 point?  Are you kidding me?  So, our millage rate was lowered … so what!  Our taxes STILL rose another $3M that year as well!!  And, we sat idly by!

No, my friends, the problem is NOT with the assessment process … Even if our assessments went up 400% … it was the local government’s RESPONSIBILITY to see that our millage rate was adjusted to allow for ONLY the collection of funds that were necessary to run our government … not, as they did, to continue the same millages and set-up new reserves, build thing we don’t need, and fatten government  … Sure, as a politician, it’s nice to be able to tell folks in your district you were able to add sidewalks to their neighborhood, or bike trails, or cart paths.  And, sure, it’ nice to be able to build a park in a place where none never existed before … and, I’m certain the betterment of our community was on each of our politician’s minds.  However, it’s time to STOP!  Time to give back!  Local government has got to be reined in!  Be vocal … stay in touch with our elected leaders … be involved!

Evan Brusilow, Principal Broker
WealthCreation NWFlorida, LLC

Many of the Trim notices that went out last month from the Bay County Property Appraiser’s Office were received with much contention. With some experiencing tax increases of 400% or more, many are on the lookout to try and get this portion of home-owner’s cost reduced. In addition to the Bay County Commission attempting to get the assessment process overhauled and rejecting the latest Tax Roll, Bay Tax Foundation (or Bay Taxpayers, Inc.) has been successful in influencing a roll back in millage rates and is currently campaigning to cap taxes and spending by the local county municipalities.

Bay Taxpayers, Inc. Mission Statement:

“Bay Taxpayers was formed in the Fall of 2006 as an advocate for the property owners of Bay County, FL. We were established to be an advocate for the taxpayers of our community to strive for equity in taxation and to demand accountability from local governmental authorities. Bay Tax Foundation was formed as a non-profit to provide research and educational services for local taxpayers and to serve as a clearing house for tax related research. We will work to assist local governments formulate sound fiscal policies and foster prudence in expenditures.

Bay Taxpayers will be a watchdog for property owners to prevent the onerous growth of governmental services and burdensome taxes. We will serve as a unified, organized voice of the taxpayers to seek relief from unconscionable tax increases and to advocate for reduced spending at all levels of government.”

To learn more, visit BayTaxpayers.org

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