Tuesday, October 30, 2007

Florida Property Tax Reform to go on ballot January 29

Voters will have to approve by a 60% majority votes the property tax reform approved by the House and Senate, Monday October 29.

The trimmed down package will reduce the average homeowner tax by an estimated $220 per year. By increasing the homestead exemption to $ 50,000, (excluding school taxes – which brings it at only about $40,000), this will hardly jump start the stalled real estate market, but it is the only choice homeowners will have next January. Take it or leave it. So, we’ll take the $ 220. We were promised that taxes would drop “like a rock”. Let’s see.

A positive provision is the portability of the “save our homes” protection, albeit also truncated to a maximum of $ 500,000. It will allow some people to move out of their homes, to upgrade or downgrade. That will possibly be a factor on the market.

The losers:
- Non- homesteaded owners, which will hardly see any difference.
- New home buyers, who will have to live with the $ 220 savings.
- Commercial properties owners who got nothing, but a small tax cut.

Consolation prize: 10% yearly cap on assessments increase for non-homesteaded properties, up from the previously 5% approved by the house. Should we add that it’s sounds like a ridiculous provision.

Anyway, they kept their promise.
Property Tax will drop.

Like a pebble.

For Sunny Isles Condos and Miami Condos, please visit my website: www.condo-southflorida.com

Sunday, October 07, 2007

Donald Trump place Fort Lauderdale project on hold.


Condo-hotel projects once were so hot in South Florida that Donald Trump planned two in Fort Lauderdale. Now he’s back down to one amid cooling enthusiasm for the novel real estate product behind much of South Florida’s recent hotel boom.

The celebrity developer expressed confidence in the Trump International Hotel and Tower under construction on the northern end of Fort Lauderdale Beach. But his partners are worried enough about condominium sales, he said, that they’ve suspended plans for the Trump Las Olas Resort to the south.

Fort Lauderdale Condos can be found on our website.

”They want to wait until the market comes back. And I agree with them,” Trump said. “At this moment, to build in this market would be foolish.”

Other developers are putting the brakes on condo-hotel projects, too. Smith Travel Research says the 7,629 condo-hotel units under development in Miami-Dade County this summer represents a 28 percent drop from a year ago.

Ugo Colombo and his partners scrapped plans to sell off rooms as condo-hotel units at the Cipriani in Miami Beach, saying they’d rather run the former Saxony hotel as a traditional resort with a separate tower of residential condos.

Miami Beach Condos can be found on our website.

Jorge Perez’s Related Group froze sales of condo-hotel units at its Viceroy South Beach and condo-hotel units at its Viceroy Miami projects as executives decide whether to keep the units as standard hotel rooms.

”We’re kind of weighing the market right now,” said Bill Thompson, head of the Viceroy project on Miami Beach.

While the depressed housing market clearly plays a dominant role in the condo-hotel pullback, the hybrid real estate product — unit owners can rent out their condos to hotel guests — faces other challenges now being magnified by the housing slump.

National hotel chains have tempered their enthusiasm for condo-hotels, refusing to lend their brands to projects unless developers pledge to leave a large chunk of rooms unsold. With hotels charging record room rates, lenders and others see the lodging sector a better bet than condominium real estate.

And with the first generation of new condo-hotel projects up and running, some developers are facing buyers disappointed by their units’ monthly returns. Two recent lawsuits against projects in Marathon and Las Vegas accuse developers of securities fraud for touting condo-hotels as lucrative investments that ended up yielding weak returns.

Edgardo Defortuna, the Miami developer planning a Mandarin resort at the site of Fort Lauderdale’s Ireland’s Inn, said the strategy remains selling condo-hotels there. But that could change.

”It does today make a lot more sense to at least consider the possibility of doing a straight hotel,” said Defortuna, president of Fortune International Realty. “Certainly the market has changed, and it’s a lot more favorable toward regular hotels.”

Hollywood Beach Condos can be found on our website.

A soaring real estate market helped scramble buyers’ expectations, since many condo-hotel units sold at prices largely divorced from what vacationers would pay to stay there, said Gregory Rumpel, a broker with Jones Lang Lasalle Hotels.

He noted the ”old adage” that developers should assume $1 in rental revenue for every $1,000 they spend building a hotel room. So a room that cost $300,000 to build should rent for about $300 a night. But some condo-hotel units in South Florida sold for $600,000 or $800,000 — meaning they should rent for as much as $800 a night.

”We just don’t get that kind of rates here,” Rumpel said. “New York maybe. Not here.”

Condo-hotel sales helped bring a number of premier lodging brands to South Florida, from the new St. Regis in Fort Lauderdale to Miami’s Four Seasons. Only Las Vegas and Orlando have more condo-hotel units under development than Miami-Dade does, according to Smith Travel.

And while Broward ranks as the nation’s 36th largest lodging market, it finishes sixth in terms of condo-hotel activity, with nearly 2,800 units under development.

Rumpel and others see the condo-hotel product enduring the current real estate downturn, but with a shift from real estate speculators to those more interested in owning vacation homes than turning a profit by renting out hotel rooms.

”For an occasional user, there is no better buy than a condo-hotel,” said Dante Alexander, president of the National Association of Condo-Hotel Owners. Along with generating more rental income than typical vacation condo, “the beauty is somebody else takes care of it for you.”

For sure, developers continue selling the concept here and in other resort destinations. Stanley Levine and partners hope to sell 17 units at their new Browns Hotel and Marina in Bimini, Bahamas. The Mondrian on South Beach reports strong sales for its West Avenue location.

And with 70 percent of the units sold at the Trump International Hotel in Fort Lauderdale, the real estate mogul whose name adorns about a dozen condo-hotel projects around the world predicts a bright future for the product — particularly in popular vacation spots like South Florida.

”You get income pretty easily, because the hotel market down there has been pretty good,” he said. “I find people really like it.”
Please visit our website:


where you can browse for Hallandale Condos, Aventura Condos, Hollywood Beach Condos

Tuesday, October 02, 2007

In the news this week:

A Judge has annulled January, 2008 referendum vote on Property Tax Reform.

A lawsuit, personally filed by Weston's mayor, Eric Hersh, and a court ruling all but killed the property tax reform project. The issue is that the proposed ballot language is flawed and confusing. At the same time, the ruling upheld Florida legislature's right to limit local governments' spending.

A simple fix would be to clarify the ballot summary. Make it transparent that whoever chooses the 'supersized' exemption would be dropping his right to the 'Save Our Homes' benefits and, perhaps, on the long run, suffer the effects of an uneducated vote, in exchange for short term relief.

Hersh suggests a possible intent to deceive voters on such an important issue, and that it could have long term effects on homeowners' pockets.

Fixing the ballot language shouldn't be a difficult task but legislators apparently prefer to take the matter to appeal court, where their odds of loosing are very high. That would avoid them the embarrassment of voters' rejection. Rumors are that this is a possible outcome since recent polls showed voters' approval dropping below 50%, while 60% is the minimum needed to pass the tax reform.

One evident blunder in the ballot summary is the promise of a minimum homestead exemption of $ 50,000 for all homeowners. This wouldn't be true for homeowners who opt to stay with their 'save our homes' exemption and their present $ 25,000 homestead exemption, dropping the new $ 50,000 'supersized' exemption.

Another evident flaw is that the ballot summary does not make it at all clear that the reform would eliminate the 'Save Our Homes' protection for whoever takes the bait and opts for the immediate 'supersized' tax relief. Additionally, it fails to clearly mention that the final objective is to definitely phase out 'Save Our Homes': the ultimate salvation of many Florida residents. Save Our Homes was instituted in 1992 and essentially keeps a cap of 3% maximum increase of the assessed value of full time residents homes.

'Save our Homes' is apparently a thorn in the side of our government. Removing it seems to be the main agenda of this tax ballot. Once phased out, our cities will very easily find their way to routinely raise their taxes according to their growing needs without any limit.

What better evidence than the steps that some cities are taking to bypass the tax rollbacks recently mandated by the legislators. Apparently, they have done it either by having it voted off by a large majority of their commissioners or through the not-so-subtle recourse of lowering the taxes on one hand and on the other hand increase their fees for many services or charging for services that were previously free.

The 'save our homes' 3% limit has been in fact a reasonable and fair way to keep tax increases within what has been the inflation index during the last 15 years.

However, while 'Save Our Homes' has protected residents from the government's taxmen, it has established a two-tier system that puts a much heavier burden on new buyers, rental properties owners, vacation home buyers, real estate investors and commercial property owners.


- Keep the 'save our homes'exemption at its present status for homestead homeowners.

- Keep the supersized homestead exemption as it was structured in the failed proposal, i.e. 75% on the first $ 200,000 of assessed value, then 15% on the next $300,000. However, this supersized exemption would not be applicable to the present 'save our homes'beneficiaries who have bought their present home before 2001 (they have already been protected from the wild home value increases during the recent 'boom').

- Extend this protection to all residential properties, vacation homes, rental properties, and commercial real estate by putting a cap on assessed value increases indexed on US inflation.

- Allow the 'portability' of their'save our homes'benefits to homeowners who are presently enjoying this protection. They are presently 'trapped'and unable to downsize after retirement age.

Of course, these reforms would not solve the immediate troubles of vacation homeowners and investors who have seen their tax bills balloon during the last 4 or 5 years. May we suggest a temporary rollback or reduction of their taxable values in 10% during the next 2 or 3 years.

Not a perfect solution, but it would give us all at least some confidence in the future.

If the 3% 'save hour homes' cap had been applied to all types of properties, regardless of their homestead status, perhaps our cities and counties would have found some restraint in their uncontrollable appetite and their growing bureaucracies and budgets; The huge increase of their 'tax base'produced by the mushrooming development should have been more than sufficient. However the automatic 'bonanza' brought over by the wildly rising property values was not compensated by a reduction of the tax rate. The new money just found its way in the local governments' budgets.

The present system is not really based on the government's needs or the citizens ability to pay. It is based on the local government's authority to tax us as much as they can. The 'save our homes' protection is the only exception.

My last suggestion: Frugality. If we all want to keep our taxes low, we have to mandate our local governments a prudent and thrifty approach. Citizens must also be prepared to limit the extent of the services received, as well as require cutbacks in unnecessary bureaucracy and duplicated services.

It is evident that the property tax system needs an overhaul. A rushed and uninformed referendum, with hidden implications and unaddressed issues, is not the solution. We are sure that this is not the way our legislature prefer and that their message will not be: 'that's all we are giving you, taking or leave it'.

Not all hopes are lost. Weston's mayor has mentioned that there are other means to put a new and better proposal on January's ballot. Florida Taxation and Budget Reform Commission could eventually place tax amendment proposals directly on the ballot.

Let's hope that something will be done in time.

condo-southflorida.com offers you the most amazing tools for your Florida home or Florida investment property search. Please visit our Website and use our multiple search tools to find an Aventura Condo, or a Hollywood Beach home, or all type of South Florida Properties.

Please visit my website, condo-southflorida.com where you will find the most amazing tools for your Florida home or Florida investment property search. Please visit our Website and use our multiple search tools to find an Aventura Condo, or a Hollywood Beach home, or all type of South Florida Properties.