Proposed Constitutional Amendments 5 and 6, tweaking property-tax laws, wouldn’t cost much and they wouldn’t change much, according to state analysts, but they have appeal and likely will pass with no trouble.
Voters have already been marking their ballots, by mail or at early-voting polling places, and other residents plan to make a decision on Election Day Nov. 3.
Not everyone is a supporter: The League of Women Voters of Florida recommends voting against both measures, standing on its long-held principle that property-tax policies should be set by local elected officials in response to their communities’ changing needs, and not by enshrining statewide measures in Florida’s Constitution.
Florida Taxwatch and other organizations, including many of Florida’s major newspapers, nod to that same principle but have opined they see no harm in either of these amendments and that each provides modest tax relief to a few Floridians at a time when our state and national economies are struggling during the COVID-19 pandemic.
Middle-class and wealthy homeowners would gain most from the passage of Amendment 5, just as they gained most from the passage in 1992 of the “Save Our Homes” Constitutional amendment.
This year’s tweak of that 1992 amendment would grant an additional year to claim a tax exemption on up to $500,000 of value when transferring a homestead exemption to a new home.
Florida Taxwatch calculates the savings at $1,730 per $100,000 of home value ($8,650 on $500,000 of value), based on the statewide average property tax rate of 17.3 mills. A mill is a $1 tax on each $1,000 of taxable value.
Florida property appraisers were solidly behind the proposed change as it moved through the 2020 Florida Legislature.
“You can’t find a property appraiser around that doesn’t think this is a great bill,” said Pinellas County Property Appraiser Mike Twitty, in testimony before the House subcommittee on local, federal and veterans affairs.
Florida voters approved the 1992 Save Our Homes amendment by citizen initiative. It capped annual growth in a homesteaded home’s taxable value at 3 percent, regardless how much the home actually increases in market value.
Florida homestead exemptions allow up to $50,000 of home value to be tax-free.
Of far greater value is the Save Our Homes rule, making as much as $500,000 of a home’s value tax-free by holding its assessed value well below its “just value.” That allows the homeowner to pay less in property taxes even if the market value of the home skyrockets. The difference between the assessed value, capped at 3 percent increases per year, and the just value determined by market forces, is called the Save Our Homes benefit.
The Save Our Homes rule allows homeowners two calendar years from the sale of their homesteaded home to transfer their Save Our Homes benefit to their new home. But technically the window proved to be as small as 13 months. For example, for a home sold in December 2015, the deadline to make the transfer was January 2017. Some taxpayers reportedly were unable to finish building or buying their next home that quickly and lost the tax-exempt benefit they had accrued.
Amendment 5 would extend the deadline to three calendar years.
If the amendment passes, the recurring revenue hit to Florida’s municipalities, school boards and special districts would be $10.2 million, according to staff analyses of the 2020 legislation that brought Amendment 5 to the Nov. 3 ballot.
Taxwatch calls the sum “miniscule” compared to Florida’s $36 billion property tax system and compared to the billions of dollars of home value removed from tax rolls by the 1992 amendment, which “shifted much of that tax burden to other properties, including commercial, second, and rental properties.”
Proposed Amendment 5 came from House Bill 371 and House Joint Resolution 369, sponsored by Rep. Rick Roth, a Palm Beach Republican. The Legislature adopted the bill and resolution in March and placed the amendment on the ballot.
Serving its large veteran population, Florida offers multiple tax breaks to veterans among other benefits. One is a discount on taxes on homesteaded properties for combat-disabled veterans who are 65 or older. That discount, adopted into the state Constitution in 2012, is equal to the percentage of the veterans’ disability.
Amendment 6 would extend the discount to the veteran’s surviving spouse. Taxwatch recommends supporting it to “provide help and appreciation” to Florida’s veterans and their spouses and further enhance Florida’s popularity as a retirement destination.
The state Revenue Estimating Conference forecasts the amendment would cost $4 million a year in reduced tax revenue: $1.6 million from local schools and $2.4 million from municipalities and other taxing districts.
Amendment 6 was authorized by House Joint Resolution 877, sponsored in 2020 by Polk County Republican Rep. Sam Killebrew and adopted by the Legislature.
If approved by voters, Amendment 6 would take effect Jan. 1, 2021.