Wednesday, January 16, 2008

Property Tax Reform?

On January 29th, 2008, a Florida Property Tax Reform proposal will go on the ballot.
A 60% majority of votes is needed to pass the reforms approved by the Legislators in October.

An extended campaign by Florida's Governor, with the support of Florida Realtors Association is under way.

My opinion?

Although pathetically insufficient and inadequate, I am seriously thinking of voting yes.
Why? The reduction of yearly taxes to the average homestead homeowner will in the best case reach about $ 220 per year. Non residents, investors, business real estate owners will see no improvement at all.

The possibility of the cities and counties bypassing the tax reduction by increasing their tax rate will probably wipe out all effectiveness of even this small relief, and the "drop as a rock" promise will just be a delusion.

However, the portability of the "save our homes" protection has been reasonably addressed and that will be an important factor in the revival of real estate in our state. Some people will be able to upgrade or downgrade on their present homes without the fear of losing this benefit.
How much will that affect the market? It remains to be seen, but it will definitely be a factor.

There are other proposals which could go on a new ballot in November 2008. One of them is the "cut property taxes now" which should limit the maximum of taxes paid to 1.35% per year on the taxable value. This would also cover snowbirds, investors, businesses, and new home buyers. It should be a much more realistic way of addressing the free spending of our
governments, avoiding loop holes and confusions. Somehow in the same way as California has successfully tackled this issue. And it will attenuate the inequity of the present tax laws.

Therefore, since we accomplish just a step ahead and leave the door open to more agressive
solutions, I am seriously thinking of voting yes on January 29.
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