The Truth About Save Our Homes Portability

I had the good fortune of attending a presentation yesterday in our office with Pamela Dubov, Chief Deputy Property Appraiser for the Pinellas County Property Appraiser located in downtown Clearwater, Florida. She presented the facts about Amendment 1 and the guidelines regarding Save Our Homes Portability. Dubov is a 18 year veteran with the Property Appraiser’s office and is running for Property Appraiser in the general election this November. She is currently seeking signatures to get on the ballot.

The following is a summary of the property tax reform measures reprinted with the permission of Pam Dubov.

Increase the Homestead Exemption from $25,000 to $50,000

The amendment increases the current homestead exemption amount of $25,000 to $50,000, but the additional $25,000 will not be exempt from taxes for schools. The additional exemption will be applied to a property owner’s assessed value between $50,001 and $75,000. This means that homeowners who live in homes that have Save Our Homes capped value of $50,000 or less will not receive the additional benefit. This measure will save the typical homestead property owner about $300 per year.

Save Our Homes Portability

Currently, when a homeowner sells his or her homestead property and purchases a new home, the assessed or capped value of the new home is its market or just value. If the owner has benefited from the Save Our Home cap for many years on his or her former home, the tax bill on the new homestead can be much higher than the owner’s former tax bill because the new bill is based on the full value, rather than a capped value.

The amendment allows owners of homestead property who currently benefit from the Save Our Homes cap to transfer their existing benefit (up to $500,000) to another residence within two years of giving up their previous homestead. They must apply for the homestead exemption and portability on their new homestead. The benefit is also available to those who had a homestead as of January 1, 2007, and who move from that home to a different home and apply for the homestead exemption for 2008. The legislature has also developed rules to determine how the cap will be moved to a new homestead when the owners of the former homestead divorce, marry, or establish separate residences.

The method used to compute the capped value of the new homestead will depend on whether the new residence is more of less valuable than the former homestead. The Property Appraiser’s staff, in the county where the new homestead is located, will acquire several pieces of information from the Property Appraiser’s Office in the county from which the property owner moved. The property owner will provide the former address, and the names of all owners of the former home.

If the just value of the new homestead is more than the previous home’s just value, the appraiser will deduct the dollar value kept off the assessed value of the former homestead from the just or market value of the new homestead.

If the new residence has a lower just value than the former homestead, the percentage of just value kept off the roll due to Save Our Homes cap on the former homestead will be applied to the new homestead’s just value to establish its Save Our Homes capped or assessed value.

In either case, homestead and other exemptions will be deducted from the new Save Our Homes capped value to arrive at the property’s taxable value.

The deadline to file for homestead exemption and for portability was March 3rd, however the Property Appraiser’s office says to go ahead and file anyway. Since this is new legislation they be somewhat flexible with the deadline date.

Ten Percent Cap on Assessed Value Increases for Non-Homestead Property

Currently, the Save Our Homes value cap applies only to properties used as a primary residence by Florida residents. The ten-percent cap will limit future increases in value for non-homestead property such as rental residential, apartments, retail, office, hotel, motel, industrial, warehouse and other property not protected by the Save Our Homes cap. While this cap does not provide as much protection as the three-percent limit on homestead property, it will help prevent the dramatic increases in commercial and rental property values in the future when the real estate market experiences double digit inflation in consecutive years, as occurred from 2001 through 2005. This cap does not apply to the taxes for schools. The 10-percent cap does not go into effect until 2009.

Twenty-Five Thousand Dollar Tangible Personal Property Exemption

Most people are familiar with the fact the owners of real estate - land and buildings - pay property taxes. What many people do not realize is that business owners also pay property taxes on the value of their personal property - things like office furniture, computers, copy machines, and manufacturing equipment, display cases and cash registers. Mobile or manufactured home owners who rent their lots from landlords also pay property taxes on their carports, storage sheds, and utility rooms and other home attachments. The constitutional amendment creates an exemption for the first $25,000 in value for each tangible property owner who files a property tax return with in 2008, and exempts them from having to file a return in the future unless they purchase additional property that increases their total property value to more than $25,000. This provision eliminates over 50,000 of the 66,000 personal property accounts in Pinellas County which contribute about one half of one percent of the value to the Pinellas County tax roll. It also ends the practice of requiring thousands of small businesses and manufactured home owners to file an annual tangible personal property return with the property appraiser’s office.

For more information about Amendment 1 and how it affects your property taxes contact your local property appraiser.