Property Tax Relief explained.......

WHAT IS THE PROBLEM?



A property tax crisis is engulfing our state and hurting the real estate industry. Property Tax levies have increased an astounding 99% between 2000 and 2007, and citizens are demanding relief. We face a situation in which people are either being taxed out of or locked into their homes.



The Save Our Homes (SOH) amendment created huge inequities among taxpayers. Due in part to SOH, local taxing authorities have increased the burden on non-homestead properties. There are also big problems associated with "Highest and Best Use" assessments on non-homesteaded properties.



The good news: Help is on the way!



WHAT DID THE LEGISLATURE DO DURING THE JUNE SPECIAL SESSION?



1. They enacted a statutory "Roll-Back and Cap" of property tax collections that has already been signed into law by Governor Crist.



2. They voted to place a Constitutional Amendment on the January 29, 2008 statewide ballot that, if approved, would create a new "super homestead exemption" worth up to $195,000 of a home's taxable value.



WHAT IS MEANT BY "ROLL-BACK AND CAP"?



Basically, the new law provides an overall cap limiting what local governments can collect in property tax. The revenue cap requires a local government to collect the same amount of revenue it did in the previous year, adjusted for new construction and statewide personal income and growth.



For the upcoming 2008 Fiscal Year that begins on October 1 this year, all local governments will be required to freeze their tax base at the 2006-2007 level with an allowance for growth going forward.



Additionally, government entities would then cut an additional 3%-9% based on their five-year history of tax increases. School boards are exempt from this provision, and all independent special taxing districts are subject to a 3% cut.



WHAT DOES THIS MEAN FOR PINELLAS COUNTY RESIDENTS?



To meet the requirements of the new "roll-back and cap" law, Pinellas County staff recently proposed lowering property tax rates and reducing spending by 7%. this would be the lowest countywide tax rate since 1987. County Commissioners still must approve the spending plan. Public hearings are scheduled in September.



WHAT IS THE DIFFERENCE BETWEEN AN ASSESSMENT CAP VERSUS A REVENUE CAP?



Save Our Homes (SOH) is an assessment cap on homestead properties only. It reduces the taxable value but does not limit the tax rate. As a result, local governments have kept millage rates artificially high in order to compensate for the taxable value that is "shielded" by SOH. This especially hurts commercial and non-homestead properties that have no assessment limitations. A revenue cap limits the amount of money that local governments can actually collect, thereby keeping pressure on elected officials to keep millage rates down.



DOES THIS LAW BENEFIT NON-HOMESTEAD PROPERTIES?



Yes! The "roll-back and cap" will apply to and protect all classes of properties from big and unpredictable year-to-year property tax increases. This includes vacation homes and commercial and rental properties. In fact, this is the very first guaranteed property tax protection for non-homestead properties in Florida history. Not only does the revenue cap apply equally to all categories of properties, it will also continually push the millage rate down.

UPDATE: The Pinellas County Commissioners met on Monday and approved the millage rate decrease.