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Making sense of Amendment 1
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| Weather halted work on a Maronda Homes construction site Saturday on Mulberry Drive. The proposed property tax Amendment 1 to be voted on in the Jan. 29 primary has the potential to raise the state’s current homestead exemption from $25,000 to $50,000 on a home that is valued at $75,000 or more. JASON MATTHEW WALKER/Lake City Reporter |
Save Our Homes will not be affected by election’s outcome.
By TODD WILSON
twilson@lakecityreporter.com
Making sense of the state’s proposed property tax Amendment 1 has been a difficult task for many Columbia County residents, according to courthouse officials who scrambled last week fielding calls and answering questions as residents began early voting before the Jan. 29 primary.
“People will not lose their Save Our Homes 3 percent cap if this passes,” said Columbia County Property Appraiser Doyle Crews. “It will remain there either way, if it passes or fails. This 3 percent cap was put in place in the constitution in 1992 and it will stay.”
Crews said concern about the 3 percent property tax appraisal cap is the main thing on the minds of Columbia County
voters. Another misconception that centers around one of the first proposals — the Super Homestead proposal — was struck down by a circuit court judge in Tallahassee and is not the proposal on the ballot.
“Super Homestead is gone. It was removed by a judge in Tallahassee,” Crews said. “This is not what you are voting on. It was one of the early proposals and it was struck down.”
Homestead exemption
On the ballot, the proposed Amendment 1 would increase the current homestead exemption from $25,000 to $50,000.
This means an individual must own a home that is valued at $75,000 or more to get the full $50,000 exemption. If an individual’s home has a just value of $60,000, the property owner would get a homestead exemption of $35,000. A home with a just value of $70,000 will receive a $45,000 homestead exemption.
“The average homestead property owner in an average home in Columbia County will see an overall savings of about $260 a year,” Crews said.
If passed, the $50,000 homestead exemption is retroactive to Jan. 1, 2008, so it will be in effect immediately.
Non-homestead property
The proposal also limits assessment increases for specified non-homestead property at 10 percent. Crews said in Columbia County, the average increase in non-homestead property is about 5 percent, so this may not have an impact locally if the measure passes.
Statewide, school revenue obtained from property taxes will not be reduced, so only the portion of property taxes collected by county government will be reduced if the system is overhauled through the referendum.
Portability
The proposal allows for a feature new to the property tax structure in Florida. The Amendment 1 proposal allows homeowners who sell their home to take the difference between the “just value” of their home and the “assessed value” with them to their new residence. The amount is known as “portability.” It is also sometimes referred to as the “Save Our Homes difference.”
The portability is deducted from the new home’s purchase price, then the $50,000 homestead exemption is applied,
as well.
Crews said an example of this would be if a home has a just value of $185,000 but an assessed value of $100,000, the portability of the home would be $85,000 that could be taken to the next home purchase.
If this resident bought a new home for $285,000, the $85,000 in portability would be deducted from the purchase price, to bring the taxable price to $200,000. Then, the new $50,000 homestead exemption would be deducted from this taxable price and taxes would be assessed on the property for $150,000, Crews said.
If the portability amount is greater than the purchase price of the new home, a state-set formula is used by the county property appraiser to assess property values and set the taxable amount. It will not mean the homeowner is exempt from paying property taxes. Also, $500,000 is the maximum amount of portability allowed under the amendment.
Critics of the portability portion of the amendment point out that school districts across the state cannot assess and collect property taxes on the portability amounts the way the amendment is proposed, so this will be lost revenue for schools, Crews said.
Crews said to make up shortfalls, most taxing authorities in Florida counties most likely would consider raising millage rates to make up shortfalls.
“The consequences (of passing Amendment 1) are schools and taxing authorities are going to lose money,” said Jeff Hampton, Columbia County senior property appraiser. “The taxing authorities are going to hurt.”
Tangible personal property
The assessments for tangible personal property, which is property owned within a small business, such as office equipment and furniture and operational equipment, or other qualifying personal property, will feature a $25,000 exemption.
Crews said the first $25,000 will be exempted on all tangible personal property except mobile homes that are classified as
tangible personal property. Businesses with tangible personal property assets will be required to file an initial return to qualify. Thereafter the requirement to file an annual return is waived unless the value of their assets exceeds $25,000.
Schools also are exempt on the tangible personal property assessment and about 70 percent of small businesses in Columbia County have $25,000 or less in tangible personal property, so these will be tax exempt if the amendment passes, Crews said.
“That’s about $175,000 in tax revenue that will be removed from our books,” Crews said.
Complex issue
Crews said overall, the Amendment 1 proposal was one of the most complex the state has ever proposed to voters.
“We’re not telling people how to vote or encouraging them one way or the other, but we want to make sure they have all the information they need to understand the proposal,” he said. “It’s a very complex issue and they need to understand it before they go vote.”
“People will not lose their Save Our Homes 3 percent cap if this passes,” said Columbia County Property Appraiser Doyle Crews. “It will remain there either way, if it passes or fails. This 3 percent cap was put in place in the constitution in 1992 and it will stay.”
Crews said concern about the 3 percent property tax appraisal cap is the main thing on the minds of Columbia County
voters. Another misconception that centers around one of the first proposals — the Super Homestead proposal — was struck down by a circuit court judge in Tallahassee and is not the proposal on the ballot.
“Super Homestead is gone. It was removed by a judge in Tallahassee,” Crews said. “This is not what you are voting on. It was one of the early proposals and it was struck down.”
Homestead exemption
On the ballot, the proposed Amendment 1 would increase the current homestead exemption from $25,000 to $50,000.
This means an individual must own a home that is valued at $75,000 or more to get the full $50,000 exemption. If an individual’s home has a just value of $60,000, the property owner would get a homestead exemption of $35,000. A home with a just value of $70,000 will receive a $45,000 homestead exemption.
“The average homestead property owner in an average home in Columbia County will see an overall savings of about $260 a year,” Crews said.
If passed, the $50,000 homestead exemption is retroactive to Jan. 1, 2008, so it will be in effect immediately.
Non-homestead property
The proposal also limits assessment increases for specified non-homestead property at 10 percent. Crews said in Columbia County, the average increase in non-homestead property is about 5 percent, so this may not have an impact locally if the measure passes.
Statewide, school revenue obtained from property taxes will not be reduced, so only the portion of property taxes collected by county government will be reduced if the system is overhauled through the referendum.
Portability
The proposal allows for a feature new to the property tax structure in Florida. The Amendment 1 proposal allows homeowners who sell their home to take the difference between the “just value” of their home and the “assessed value” with them to their new residence. The amount is known as “portability.” It is also sometimes referred to as the “Save Our Homes difference.”
The portability is deducted from the new home’s purchase price, then the $50,000 homestead exemption is applied,
as well.
Crews said an example of this would be if a home has a just value of $185,000 but an assessed value of $100,000, the portability of the home would be $85,000 that could be taken to the next home purchase.
If this resident bought a new home for $285,000, the $85,000 in portability would be deducted from the purchase price, to bring the taxable price to $200,000. Then, the new $50,000 homestead exemption would be deducted from this taxable price and taxes would be assessed on the property for $150,000, Crews said.
If the portability amount is greater than the purchase price of the new home, a state-set formula is used by the county property appraiser to assess property values and set the taxable amount. It will not mean the homeowner is exempt from paying property taxes. Also, $500,000 is the maximum amount of portability allowed under the amendment.
Critics of the portability portion of the amendment point out that school districts across the state cannot assess and collect property taxes on the portability amounts the way the amendment is proposed, so this will be lost revenue for schools, Crews said.
Crews said to make up shortfalls, most taxing authorities in Florida counties most likely would consider raising millage rates to make up shortfalls.
“The consequences (of passing Amendment 1) are schools and taxing authorities are going to lose money,” said Jeff Hampton, Columbia County senior property appraiser. “The taxing authorities are going to hurt.”
Tangible personal property
The assessments for tangible personal property, which is property owned within a small business, such as office equipment and furniture and operational equipment, or other qualifying personal property, will feature a $25,000 exemption.
Crews said the first $25,000 will be exempted on all tangible personal property except mobile homes that are classified as
tangible personal property. Businesses with tangible personal property assets will be required to file an initial return to qualify. Thereafter the requirement to file an annual return is waived unless the value of their assets exceeds $25,000.
Schools also are exempt on the tangible personal property assessment and about 70 percent of small businesses in Columbia County have $25,000 or less in tangible personal property, so these will be tax exempt if the amendment passes, Crews said.
“That’s about $175,000 in tax revenue that will be removed from our books,” Crews said.
Complex issue
Crews said overall, the Amendment 1 proposal was one of the most complex the state has ever proposed to voters.
“We’re not telling people how to vote or encouraging them one way or the other, but we want to make sure they have all the information they need to understand the proposal,” he said. “It’s a very complex issue and they need to understand it before they go vote.”
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