After so much bad news in the real estate market, finally there is something that promises a positive change. On January 29, 2008 Florida voters will be asked to vote on a constitutional amendment to expand Florida’s property tax homestead exemption. However, Florida’s $25,000 homestead exemption will not change unless 60% of voters approve the constitutional amendment. If this happens, those with homestead exemptions may choose the new ”super-sized” exemption or keep current tax breaks, including the $25,000 exemption and the Save Our Homes tax break, which limits annual assessment increases to 3%. Those who choose the super-sized exemption can shield up to $195,000 of their home’s value. If voters vote in January 2008 to expand Florida’s homestead exemption, these additional savings would be on the tax bill in November 2008.
The new “super-sized” exemption would not benefit everybody. Those owning a home for years and whose market value rose may benefit staying with Save Our Homes. Let’s say you bought a home 10 years ago, and your taxable value is $200,000, but the appraised value is higher, say $500,000. Under Save Our Homes, you pay taxes on $175,000 — $200,000 minus your homestead exemption of $25,000.
Nevertheless, the new “super-sized” exemption is excellent for new buyers. Taking the same example of house appraised at $500,000, a new buyer would pay taxes on $305,000 instead of $500,000. First time homebuyers and people who move will be afforded substantially bigger savings – up to $195,000 in exemptions, compared to the only $25,000 that they receive now. This new plan also assures most people that they won’t be hit with a tax bill many times what they pay now on their next home purchase.
All of the potential buyers waiting for a positive change in the market will get a clear break and should be ready to buy. So even if the “super-sized” exemption does not benefit you directly, everybody must vote “YES” to revitalize the housing market in Florida.