High insurance and high property taxes have been a major part of our slowed market. Insurance issues were addressed during the regular session of the Florida legislature - though the result seems to be reduced increases rather than rollbacks of premiums and an assumption of some reinsurance role by the State of Florida in case of disaster.
After 3 days in special session, the legislature passed two prongs regarding property tax reductions. Counties will have to roll back taxes from 3% - 9% (though there are provisions for the counties to override this). Further, legislators proposed a new higher homestead exemption: 75% of the first $200,000 of value would be exempted and 15% of the value between $200,000 and $500,000 would be exempted. In order to pass this, there was also a provision that primary residents could keep their present Save-Our-Homes cap if it resulted in lower taxes. The changes to the homestead exemption need to go before the Florida voters and be passed by them before this can take effect. That election is scheduled for January 2008.
Jennifer - it has been simple: $25,000 is exempted. Then several years ago Florida followed California in "Save Our Homes" so that older homeowners wouldn't be taxed out of their homes - the property was assessed at market value the tax year after someone purchased, and if it was their primary residence, the assessed value could only go up 3% per year. That worked well - so well that people started complaining because they didn't want to move because their taxes would increase so much, thus wanted "portability". New owners complained about the inequity of their taxes compared to their neighbors.
One of the proposals thrown out was to eliminate the property tax and increase the sales tax by 2-3%. I was all in favor of that, but it died without discussion. That would share the burden among full time residents, part time residents and visitors. It would NOT penalize the poor because food and medicine are not taxed, and school clothes and hurricane supplies have tax free periods of the year - so each person could decide whether to buy something, i.e., whether and how much to be taxed. Very simple to figure out and collect. That would even eliminate the tax appraisers staff in each county, the photographers, the pilots to take aerial photos, the court costs for appeals, the tax collectors - all the increased revenue would be handled by the existing sales tax staff. Most people I've talked to liked that idea - but it died a quiet death. Guess it was TOO simple.
Jennifer. So true. Thought you'd appreciate that the St. Petersburg Times this morning wrote an article with their third attempt at a form for people to figure out their property taxes, saying that both the initial article and the correcting article were wrong. Just from reading today's article I know that that's wrong, too.
Perhaps the unemployed tax office people could take jobs at the newspaper!
It is hard to get ahead these days. Buy a piece of property, turn it into a rental property and try to get ahead, but find out that property taxes take away any positive cash flow. I bought a piece of property in 1999, paid $1200 in property taxes, turned into a rental this year and now my taxes are $5000.
Going rents in the area of Jacksonville do not allow you to buy property and turn into rental income because of property taxes based on "market value". Government taxes should not stop you from getting ahead.
The new Governor is taking on the real issues of the people and will be President in the future. Lets follow his lead.
Property taxes and insurance were the biggest concerns of people when addressed by candidates last year.
In our area with 20% down it's impossible to generate positive cash flow from rental property.