One of the reasons the Florida real estate market has been sluggish in recent years has been a result of property taxes in the state. Over the course of the last decade, Florida, in fact, had one of the highest property tax rates in all of the United States. Efforts are now being made to control the costs associated with property tax in Florida at this time. By addressing property tax issues, the goal is to reinvigorate Florida’s real estate market.
Many real estate experts have argued that residential real estate has languished in the market in part due to the fact that real estate tax rates have been considered high. Some people simply declined to purchase a residence because they did not feel they could effectively and comfortably manage the property tax assessments they would face when purchasing a home.
Historically, the new owner of a residence had to bear the purchase price as the basis for calculating property tax. Thus, this provided the buyer with additional motivation to actually negotiate a purchase price that might even end up below the appropriate market rate.
Recently in Tampa, advocacy was held for a new proposed constitutional amendment involving property valuation, property taxes, and home purchase on the home of a Tampa resident who has owned property in the market for an extended period of time. This resident had learned that one of the reasons his property was slow to sell lay in the fact that many potential buyers simply did not feel they could effectively or adequately manage the property tax that would be assessed against the property. depending on the request. sale price of the house.
If the proposed new amendment becomes part of the Florida constitution, the valuation for tax purposes of residential real estate would be “reset” to the lower actual market value immediately after the sale. Therefore, the new owner of the property would not be “stuck” with the higher property assessment that would otherwise occur in the absence of this amendment.
Beyond this proposed amendment, there is also a proposal that would allow a super exemption on homestead property. This super exemption would actually work to exclude a higher percentage of the home’s total value from property tax liability. This mechanism will work to significantly reduce the owner’s tax liability in many cases. An owner would have the ability to select one or the other of these two tax liability reduction plans, but not both. An owner will be able to determine which scheme makes sense under his or her particular set of circumstances.
The bottom line is that Florida government leaders are trying to take useful and meaningful steps to reduce the costs associated with owning property in the state. The goal is to stabilize the market sooner rather than later.