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HomeMy WebLinkAbout2007 06 16 Tax Relief SummaryTAX RELIEF SUMMARY The Florida Legislature concluded the special session Thursday, June 14, 2007, by approving a property tax relief and reform package that includes a statutory tax relief bill, House Bill 16, that will immediately cut taxes and cap future tax increases for all property owners; it restricts local governments' ability to raise taxes in the future; and provides immediate savings to homeowners, second homeowners, and commercial property owners. The Florida Legislature also approved a proposed constitutional amendment on homestead exemptions to be placed before voters at the January 29, 2008 presidential primary The following is a summary of the bills approved yesterday: HB 1 B by Representative Attkisson "Property Tax: Immediate Statutory Relief' Creates immediate tax relief for all properties in Florida thi~ear. o Homestead property owners save an average of 7% ($174). o Non-homestead residential property owners save an average of 7% ($199). o Commercial/industrial property owners save an average of 6% ($941). o Tangible personal property taxpayers save an average of 6% ($92). Requires all local governments except school districts to cut taxes this year. o First, cities, counties, and independent special districts must reduce taxes for the 2007-2008 Fiscal Year by adopting the 2006- 2007 tax levy, adjusted for new construction (i.e., adopt the rolled- back rate). o Next, cities and counties must further reduce taxes by a factor based on whether they have recently levied property taxes responsibly or excessively, compared to a statewide average. The reduction factor will be 3%, 5%, 7%, or 9%. o All independent special districts are required to implement the 3% reduction factor. • Requires all local governments except school districts to cap annual property tax revenue growth. o Property tax revenue growth will only be allowed to increase in proportion to population growth (i.e., new construction) and growth of Florida personal income (which averages 4% annually). o A revenue cap creates unprecedented protections for all Florida properties -especially commercial properties and non-homestead residential properties, which currently have no specific protection. • Protects taxpayers while allowing local flexibility by requiring a s ecific procedure to override the required revenue cap. o Depending on the extent to which the local authority wants to exceed the revenue cap, varying supermajority votes are required. o A slight increase requires a 2/3 vote, while a larger increase will require either a unanimous vote or approval by local voters. Implements provisions authorized in the constitutional reform plan (HJR 3B). o The implemented provisions are: o The new "super" homestead exemption. o The new homestead exemption for low-income seniors. o The grandfathering provisions that allow certain homeowners to maintain Save Our Homes benefits. o Homeowners will be allowed to choose between their current Save Our Homes protections or the new, "Super Homestead" and expanded taxpayer protections under the constitutional amendment. o The new tax protections for affordable housing. HJR 3B by Representative Cannon "Property Tax: Constitutional Relief & Reform" Offers $16 billion of tax relief over five years. The savings by property type in 2008 are: o Average Homestead switching from Save Our Homes: 44% ($1,306) o Average Non-homestead Residential: 8% ($245) o Average Commercial/Industrial: 8% ($1,240) o Average Tangible Personal Property savings: 17% ($262) Allows homeowners to choose between Save Our Homes or the new plan. o No one will lose their current Save Our Homes protections unless they choose to. o Homeowners will be allowed to choose between their current Save Our Homes protections or the new, "Super Homestead" and expanded taxpayer protections under the constitutional amendment. o This creates a form of portability for homeowners who would otherwise lose significant tax savings when they move. o Rather than starting over with only a $25,000 homestead exemption and zero Save Our Homes protections, the homeowner would immediately have a homestead exemption up to $195,000 as soon as they move in. • Creates a new "Super Homestead" exemption to transform the inequitable Florida property tax system. o The new exemption covers 75% of the first $200,000 of value and 15% of the next $300,000. o Thus, the maximum super exemption is $195,000. o All homesteads will receive at least a $50,000 exemption. o Qualifying tow-income seniors will receive at least a $100,000 exemption. o The upper $500,000 threshold is indexed to grow with changes in Florida personal income, which generally increases 4% per year. • Authorizes a new $25,000 Tangible Personal Property (TPP) exemption for businesses. o This creates immediate savings of hundreds of dollars for TPP- paying business owners. o It also eliminates the administrative burden of filing a tax return for $1 million of Florida's 1.3 million businesses that pay tangible personal property. • Authorizes targeted relief for affordable housing and working waterfront properties. Implements tax reform and relief for 2008 tax bills, provided the Legislature votes for a special election in January 2008 (HB 56).