Property tax reform amendment 101

Wednesday, January 9, 2008

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Some real estate agents support the amendment, saying it would encourage people to buy homes.

Florida voters will make a historic decision on property tax reform on Jan. 29.

The reform question, which is Amendment 1 on the ballot, boosts the homestead exemption, raising it from $25,000 to $50,000, and allows homeowners to take their current property tax burden with them to a new home.

"As it stands right now my taxes may be $2,000 a year," said USF finance professor Ken Weiand. "If I sold my home and bought it back tomorrow, I may pay $6,000 for that same house.

What this will allow me to do as a homeowner is take that value of the house, the $2,000, and move it over to a house of equal value and pay the same amount."

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For business owners and landlords, the amendment would keep property taxes from rising more than 10 percent a year.

But some counties say the passing of the amendment will hurt their revenue.

State economists have crunched the numbers and calculated that the Bay area could lose millions of dollars in property taxes each year.

But Pinellas County's budget director projects a higher loss.

"We feel based on the preliminary estimates that we have right now, the impact's going to be more like $40 to $50 million," said budget director John Woodruff.

Some county administrators say they'll have to drop some existing programs.

Projected county losses

Hernando: $6 million
Pasco: $16 million
Hillsborough: $39 million
Pinellas: $40-$50 million

It's estimated homeowners will probably save about $250 a year, but the property tax reform bill wouldn't save renters any money.

Real estate agents support Amendment 1. They believe the portability factor will encourage people to buy homes and boost the sluggish housing market.

But firefighter unions have opposed the amendment, saying the amendment would cut into emergency services.