INFORMATION FROM VOLUSIA TAX REFORM
VTR realizes we did not get the significant tax reduction for this year that we all were hoping for; remember Volusia tax reform's goal has been and continues to be 'TRUE, MEANINGFUL AND COMPREHENSIVE TAX REFORM"... and what has just happened, is the first step of many that will have to be done:
We always knew Tallahassee was the only one that could fix the inequity in our tax system.....as we know the two issues that caused the inequity problems are: save our homes and the overspending of our taxing authorities; this new plan and the constitutional amendment address these issues; the new plan caps the revenues taxing districts can collect from real estate taxes, however, it does not address the overall spending of the taxing authorities, which VTR has always been in favor of; additionally, we have been advised that it will cap the school revenues that they can get from real estate taxes beginning in the year 2009. These are all legislative actions that do not need voter approval and Tallahassee can control. The snow birds, business owners, landlords, etc., will not receive very much significant relief this year unless we pressure our local elected officials to lower the millage rate, which I think we will be successful if we pressure them! that is the key... also, assessed values will drop next year... perhaps not that much this year ( I have been receiving emails that some assessments have dropped significantly and others have increased significantly)... so the two combined, it will reduce the taxes; how far who knows....we will wait and see; as for businesses we need to pressure Tallahassee next year to change from "highest and best use" to "current use" which will help significantly; as for landlords, there is something about basing the assessed value on rental income; we do not have the details of that yet to see if that is significant.... again, it is left up to the citizens to pressure our local officials to reduce further...... that is why it is imperative to be active in the budget advisory committees to hold our local elected officials accountable.!!!!
The new constitutional amendment will eventually get rid of the current save our homes and the assessment cap; the new super exemption will make home ownership more affordable for the lower and middle class as the first $500,000.00 will receive a $195,000.00 exemption; i.e., pay taxes on $305,000.00; so with the capping of the taxing authorities and eventual fading away of save our homes, the shifting of the tax burden will be on a more level playing field and more evenly distribute the tax burden. So in essence, Tallahassee has come up with a plan to add more equity in the tax burden.
Now, it depends upon your personal situation... if you plan on staying in your home for the rest of your life, as I plan on doing, then I am going to retain the current save our homes; however, most people are not like this... they move every 5 to 10 years.... so in that event, you may want the super exemption. If you move into a more expensive home, obviously you would pay more tax; for the first $200,000.00 you get an exemption of 75%; i.e.., $100,000.00 home, if there is one anymore, and pay taxes on $25,000.00; if your house is assessed at $200,000.00 you pay taxes on $50,000.00; then any homestead from $200,000.00 to $500,000.00 will receive an ADDITIONAL 15% EXEMPTION. i.e., house assessed at $350,000.00 you pay taxes on $`177,500.00; a house assessed at $500,000.00 you will pay tax on $305,000.00...over $500,000.00 you will receive a total exemption of $195,000.00. If you downsize, then of course, the super exemption will reduce your real estate taxes. This could open up the residential real estate market and enable residents to start moving again. VTR has been advised there will be a mechanism in place on the new amendment that will increase the percentage of the exemption up to $500,000.00 to help offset the potential increase in assessed values. however for those who own homes above $500,000.00 will receive a total of $195,000.00 exemption... we have to wait until the ballot language comes available for review to know for certain... VTR is not necessarily endorsing this ballot amendment however, we are stating more research needs to be done; we are just trying to explain this more clearly...
Please read this excerpt from Florida tax watch, which is an excellent research organization:
The plan is certainly far from perfect, but it is an improvement over the current system. It should have better targeted relief to those who have been hurt the most during the run-up in taxes, but it does embody several of the principles and results promoted by Florida Tax Watch recommendations.
The cap of future property tax growth has been long overdue. The new exemption will address many of the inequities that exist among homestead properties. First time homeowners will get relief. The plan provides a measure of portability. People will no longer have to face being taxed at full value when they move.
And perhaps the most importation result, from a tax reform perspective, is that this marks the beginning of the end for Save Our Homes and its tax shifting to business, renters and non-homestead residences, new homebuyers and people who move. Because homeowners get the new exemption when they move, Save Our Homes will eventually go away. Florida Tax Watch has continually said that the elimination of SOH was critical to true long-term reform, but that it should be done without increasing taxes on homeowners and making sure they are protected from rapid tax growth. This plan accomplishes that.
Volusia tax reform will host a town hall meeting with Morgan Gilreath in the next few weeks to discuss the exact impacts this will have on Volusia county residents and businesses, snow birds, etc.
I hope this answers some of the many questions that you have
Margie Patchett Executive Director
VOLUSIA TAX REFORM
1540 Cornerstone Blvd
Suite 200
Daytona Beach, FL 32117
Phone (386) 212-3968