Florida voters have mixed feelings about a proposed constitutional amendment that provides property tax breaks to first-time home buyers and lowers the assessment cap for commercial and non-homestead property.
Amendment 4, which will appear on the November 6th ballot, needs at least 60% voter approval to pass.
Amendment 4 includes two major changes to the Florida tax code:
1. First-time homebuyers receive an additional tax exemption
2. The assessment cap on non-homestead property is reduced from 10% to 5%
First-time homebuyers are defined as those who have not owned a home in Florida in the past three years. Amendment 4 allows them an additional homestead exemption on half the appraised value of their home (up to $150,000) phased out over five years.
The lower assessment cap on non-homestead property benefits commercial property owners and those who own second homes, including those living out of state.
The Survey Says…
A poll by the University of Florida's Bureau of Economic and Business Research finds that while Floridians seem willing to help first-time homebuyers, they are less interested in extending property tax reductions to commercial owners and those who own second homes (See graph).
Supporters of Amendment 4, primarily Florida Realtors, claim lower property taxes will lead to more home sales and ultimately more jobs.
Opponents argue that assessment caps create serious inequities among taxpayers. Virtually identical commercial properties could face drastic differences in taxes while competing for the same tenant base. Also, the cap is lifted when properties sell and the value increases to market value based on the sales price.
The Save Our Homes amendment that passed in the 1990s capped annual assessment increases for primary residences at 3%. Over time, it has forced recent home buyers to pay increasingly larger tax bills than longtime owners, even on homes with the same market value. Analysts say a lower assessment cap on commercial and non-homestead properties will create the same situation.