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Jackie Colson-Miller

Jackie Colson-Miller, CIPS
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Florida Real Estate Taxes On The Hotseat

The big news in Florida is a proposal to eliminate the Real Estate taxes for all Homestead properties.

Florida properties are reassessed when they are sold. Over the past few years, rising property values, along with the 3% annual “cap” on Homestead property has caused huge increases in property taxes, so people feel “trapped” in their homes.

For instance, if a homestead property sold in 2000 for Housefor_sale$250,000, the annual tax bill would be around $5000 and the assessment could increase up to 3% per year. In 2007 that property is worth $600,000 but the taxes have barely increased over the seven years, while the value has risen dramatically. If those owners sold their home and bought another home for the SAME price, $600,000, their annual tax bill in 2007 would be over $12,000.

Something must be done to “even” out the taxes among all property owners.

The proposal to eliminate the property tax is interesting. It calls for a 2.5% increase in sales taxes, while eliminating property taxes for all homestead properties. It doesn’t deal with the rising tax costs to investors, who get reassessed every year, but it really would boost the Florida economy. Think about it. DOL_LARFlorida has no State Income tax. Couple that with no property taxes and companies will be moving here in droves!

Since, Americans are spenders vs. savers, I expect all of those property tax dollars would be spent on other consumer goods in the state. More people would be buying real estate, which means more purchases of landscaping, decorating items, furniture, etc…more sales taxes. I expect the final plan will be some “hybrid” of a lower mileage rate and a slightly higher sales tax. Florida also has one of the lowest taxes on cigarettes…throw that into the mix.

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11 responses to “Florida Real Estate Taxes On The Hotseat”

  1. Karen says:

    Great article on taxes..Thanks for the info. Very nice website.

  2. Maureen Z. says:

    Thoughtful insight into the Florida property tax question. Should this woman perhaps run for a local political seat as well? Jackie offers compelling viewpoint…

  3. Janet says:

    Very interesting…thanks for making it so clear!

  4. Barbara K says:

    As a senior citizen on a limited income, the homestead exemption is important to me and to other seniors

  5. Donna K says:

    Interesting perspective. I see it differently.

    A sales tax is a regressive tax and therefore BAD for low income families. Those families don’t usually buy real estate let alone property worth $600,000.

    A sales tax at your projected 9.5% (some estimate more) will ADD to everyone’s expenses. You rightfully noted that we Americans are a nation of spenders not savers. Every dollar we spend would cost us 2.5 cents more than before! That extra 2.5% cuts into the budget of a lower income person more than say a person making $80,000 or $100,000 but actually more since you are speaking of buying a house worth in the $100s of thousands.

    Every $1,000 spent on consumer goods would cost an extra $25. Yeah, doesn’t seem like a lot but that $25 represents a larger percentage of the income of someone making $12,792 (minimum wage) or less a year than it does to someone making $100,000! Regressive tax! Fair/equitable?

    This fix would help those with more already. Inflated real estate prices should not be supported by the poor non-homeowner… or even those of us with a home living comfortable & simple.

    And… How much more will our tourists be willing to pay for us not having a state income or property taxes? Some will choose to go elsewhere, I think. Increased costs decrease demand.

  6. Karen says:

    Question for you Ms.Sizzle.
    Government is talking about rolling back home value to 2001 for a new tax base.
    How would it work with new construction that has been developed after 2001? Where would they come up with that value?

  7. Jackie says:

    I have a call in the the property appraiser’s office to answer your question!

  8. Jackie says:

    As for the tourists going elsewhere, unless they move Disney World, that’s not very likely!

  9. mallo says:

    i like your new picture much better.

  10. Yes, sales taxes are regressive, but they are also a good choice if you want to “export” your tax onto people who don’t permanently live there, i.e. tourists. States with high tourism tend to rely heavily (too heavily?) on sales taxes.

    Anyway, FL needs to find a way out of this trap. Living and working in GA as a REALTOR, probably 20-30% of my prospects from my website and blog are from FL. Many of them want a new home, but they can’t repurchase in FL becuase of this property tax trap. “The Trap” is good for my business ;->

  11. Fred Hauck says:

    Interesting alternative to the ever increasing property tax issue. Though I do not favor and increase in sales tax I would certainly entertain a debate on an off-set between sales tax and property tax.