Save Our Homes: Keep It? Drop It?
Jerome Stockfisch
Tampa Tribune
Jun 16, 2007
TALLAHASSEE - The Legislature passed a resolution in this week's special session that will seek voter approval to provide a "super" homestead exemption to lower property tax bills.
There was a surprise greeting lawmakers when they arrived Thursday for the final votes. After a 1:30 a.m. revelation among chief negotiators, the brain trust introduced an amendment that would allow homeowners to retain their existing Save Our Homes benefit if they prefer it to the new exemption.
The superexemption would be based on a home's just or market value: 75 percent of the first $200,000 of value and 15 percent of the next $300,000. The existing system provides a flat $25,000 homestead exemption and caps any increase in the taxable value of a home at 3 percent.
The constitutional amendment goes to the polls on Jan. 29. If it passes, homeowners then have a decision to make. Take the new exemption? Stick with Save Our Homes?
Legislative leaders say 73 percent of homestead properties in Florida would receive a greater benefit under the new exemption. Homeowners are urged to consult experts before making such a decision, which House Democratic Leader Dan Gelber likened to playing "Deal or No Deal" with your house.
If a constitutional amendment is approved on Jan. 29, homeowners will be able to decide for themselves whether they want their existing Save Our Homes valuation protection or would prefer the new "super" homestead exemption.
The default position is the existing Save Our Homes system; homeowners will have to act to select the superexemption, most likely through an application similar to the one to become eligible for the existing homestead exemption. Once they switch, they can't go back. Here are some examples of how different circumstances could lead to different decisions:
Person A: Longtime Homeowner
Bought a house for $100,000 in 1990. The 1990 taxable value with the $25,000 homestead exemption was $75,000, which grew at 3 percent per year under the Save Our Homes cap.
Current market value: $300,000
Taxable value today: $123,964
Tax bill (based on typical local rate of 2 percent): $2,479
Superexemption: $165,000
Taxable value using the superexemption: $135,000
Tax bill with superexemption (based on a typical local tax rate of 2 percent): $2,700
Person A would be better off keeping the existing homestead exemption and Save Our Homes protection.
Person B: New Homebuyer
Bought a house for $200,000 in 2005. Holds a $25,000 homestead exemption and Save Our Homes protection. We'll assume the home's just or market value rises 6 percent a year (the median increase in home sale prices in 2006).
Current market value: $224,720
Taxable value today: $185,657
Tax bill (based on a typical local rate of 2 percent): $3,700
Superexemption: $153,708
Taxable value using the superexemption: $71,012
Tax bill under superexemption (based on a typical local tax rate of 2 percent): $1,420
Person B would be better off accepting the superexemption.
Person C: New Homebuyer; In It For The Long Haul
Person C mirrors Person B, buying a house for $200,000 in 2005, but Person C intends to live in the home at least 20 years. We'll assume the home's just or market value rises 6 percent a year (the median increase in home sale prices in 2006).
Taxable value in 2025 with 3 percent Save Our Homes: $316,065
Tax bill (based on a typical local tax rate of 2 percent): $6,321
2025 market value at 6 percent increase per year: $641,427
Superexemption: $195,000
Taxable value using the superexemption: $446,427
Tax bill under superexemption (based on a typical local tax rate of 2 percent): $8,929
Person C might be better off sticking with the existing homestead exemption and Save Our Homes cap. In fact, any future home value over $511,065 could result in a higher tax bill for Person C. This home hits that threshold in 2021.
Reporter Jerome R. Stockfisch can be reached at (850) 222-8382 or jstockfisch@tampatrib.com.