Florida lawmakers have taken back a property tax exemption for some developers of low income housing. Officials say a loophole in the law allowed for-profit businesses to avoid paying taxes.
Two years ago, the Legislature enacted a law intended to help non-profit builders like Habitat for Humanity receive the same property tax exemptions for building larger-scale apartment projects for the needy, as they do for building single-family houses.
An unintended consequence of the legislation allowed for-profit developers to transfer ownership of apartment complexes in a way that removes the properties from local tax rolls.
As the general counsel for the Florida Housing Finance Corporation told the Orlando Sentinel, "It appears that none of these for-profit projects needed any kind of tax relief. They are all cash-flowing companies."
The new law, effective July 1, repeals the tax exemption for certain limited partnerships.
"There are still other state and federal tax credits available to entities involved in affordable housing," explained Senator Wilton Simpson, sponsor of the Bill. "Repealing this exemption was the right thing to do for the State of Florida," Simpson said.
The Revenue Estimating Conference reports the change in the law will have a positive fiscal impact on local government tax revenues in Fiscal Year 2013-2014 of $23.4 million and $117.2 millon recurring after that.