House to ask voters to trade property tax for more sales tax

I've been hearing about this. One problem is that the cap is not really a cap since it can be raised.

I'm wondering if the current Mayor of Panama City will be able to have both of her homesteaded properties be tax free... She has had homestead on two houses for over 15 years and is only recently being busted for it.

With all of the "unfair" comments on the current Save Our Homes Act, I think many out of state owners will have much more complaining to add to their lists of complaints regarding the property tax situation in Florida.

This will not help the RE market - Second homeowners and investers will not like being the ones to pay the bill.

This will not help the RE market - Second homeowners and investers will not like being the ones to pay the bill.

It may not be great for many SoWal buyers, but it sure would kick-start the RE market statewide. Guaranteed.

There are many thousands of residents who would love to upsize or downsize but feel trapped in their homes thanks to the Save Our Homes cap. The flaws in that well-intentioned law have been exposed by the RE runup of recent years.

The sales tax proposal is much more intriguing than the Crist camp's "Save our Homes portability" proposal, which would only increase the inequities in the tax laws.

-- While sales taxes are usually regressive, this may not hurt the lower income renters too much, since their rents have been climbing thanks to the landlords' higher tax bills. The House is talking about extending the initial 20 percent rollback to non-homesteaded properties like rental homes and vacation homes, so in reality the renters may not be affected that much, and SoWal non-homesteaders will benefit, at least a little.

-- As for SoWallers in the long run, that remains to be seen, but keep in mind SoWallers are NOT subject to the higher millage rates in incorporated areas. Millage rates in Tampa and St. Petersburg for example are in the 26-28 range, where in Walton County it is under 10. Taxes really are more affordable in SoWal than many parts of the state.

-- It may hurt some of the fixed income retiree homeowners, since their paltry property tax bills will be eliminated and sales taxes will go up. However they are not usually big consumers so most of them may actually benefit.

-- Those residents with middling tax bills will benefit, and those with the highest tax bills will benefit a LOT. Though the higher-tax-bill people will lose a very large federal income tax deduction, and their income taxes will go up accordingly. How much extra money would the feds get? I am wondering. :scratch:

-- Tourists will complain but come anyway.

-- Businesses might be hurt the most. They started complaining loudly yesterday. Unless they are protected in some way, this proposal probably won't have legs simply because the businesses could be hurt so badly.

-- If everyone is protected, that means a huge spending cut for most or many governments, and what exactly will happen to services?

:popcorn: At the very least it shows the Legislature is considering all changes, no matter how radical. My guess is they will end up doing something drastic that will really help the RE market.

Prediction: House and Senate roll back all property taxes by 20 percent or so, then institute an inflation-adjusted spending cap. :clap_1: It would help everyone.

I'd like to hear from folks who have their primary residence in FL. I recently moved to Santa Rosa (full time) and would benefit from this. My impulsive thought is that I would be in favor but I would like to hear more from the other side...

Pls give me something more than-

"Visitors or second home owners don't want to pay for the homesteaders' property."

Has this been done elsewhere? How did it go? What was the impact? Were the expected benefits recognized? Were there unexpected consequences?

I think I am in favor but would love to see some intelligent debate here to help me finalize my opinion...

Cheers,
G

I'd like to hear from folks who have their primary residence in FL. I recently moved to Santa Rosa (full time) and would benefit from this. My impulsive thought is that I would be in favor but I would like to hear more from the other side...

Pls give me something more than-

"Visitors or second home owners don't want to pay for the homesteaders' property."

Has this been done elsewhere? How did it go? What was the impact? Were the expected benefits recognized? Were there unexpected consequences?

I think I am in favor but would love to see some intelligent debate here to help me finalize my opinion...

Cheers,
G

Geowickey how big of you to try to see the other side. :cool: Most homesteaders are jumping up and down with glee.

I think this is kind of radical. I don't think it has been done before and the numbers have not been crunched enough yet. How much of the tax burden would fall on the cities and counties (ie shortfall of funds), how much would fall to the tourists, and how much would fall to the non-homesteaders remains to be seen, from what I have read.

I have read that other states who have higher sales taxes and lower property taxes also have state income taxes, which we don't here (a sacred cow btw).

This definitely would require a constitutional amendment, and it could go on the ballot as early as this fall. It's too early to try to finalize an opinion ...

:popcorn: :popcorn: :popcorn:

One thing I like about this idea is that all of the cheap plastic crap which is purchased here will be partially paying for homesteaded property taxes.

A while back, I said that we can expect more second homeonwers to "move" to Florida as their choice for homestead. I think we will see this happen if this new tax idea is approved. It sure will be helpful in keeping those 1,000 people per day, moving to Florida. This would be a big draw for those baby boomers already thinking about warmer sunny days. Since we don't have sales taxes on groceries, I think this idea could be very popular among those who are on fixed income. It is more like a spending tax. That is also the downside, that people might be less likely to purchase consumer goods. With only a 2.5 cent increase per dollar, it most likely wouldn't affect many people's decision to purchase items, but if the cap can keep being raised, we might eventually hit a point where it is affected. I doubt it will affect tourists' decision to purchase, those are the people who put the meat on the table for Florida.

I believe that with time, it will be very difficult to find employees to staff the businesses in our area. It is already rather difficult. This could be one saving grace to help keep people here to staff the services and businesses upon which we rely. However, it is true that many of those people cannot afford to live here anyway if they do not already own, but for those who have owned, it will be a welcome relief, and maybe the one thing that keeps them here.

I don't like this idea at all. What I have heard is that a 2.5% increase in the state sales tax would only reduce property tax, specifically the portion appropriated to schools. To scrap property tax completely, the state sales tax would need to go to at least 13.5%. At least, that's what the articles I read two days ago said.

The proponents of this plan appear to have forgotten that there are certain taxes that by law piggy-back the state sales tax. For example, a 8.5% state sales tax rate becomes 9.5% in Walton County, due to the 1% local option surtax.

Worse yet (listen closely, rental owners) is that a visitor to our area will pay 8.5% + 1% + 4% = 13.5% tax to stay in a transient rental accommodation. Currently, there are a couple of other areas in the state in which the total is 14 to 15%, and their tourism doesn't appear to be hurting, but I am not certain how well 13.5% would set with our visitors. Now...if the base state sales tax goes to 13.5%, the total lodging taxes go to 18.5% 😱 . Folks will still come, but I foresee shorter stays...and over time, total revenues will decrease. Also, there would definitely be an impetus for less-than-honest rental managers to circumvent the tax (it happens too frequently as it is!)

Florida will be known as the state that shot the golden goose. And once you do something as drastic as this, you can't undo it.

Ah, yes, another regressive tax, fairness and equality for none.

Believe it or not, there are actually working class people in Florida. Since Floridians spend on average 40% of their income on taxable items. Equal to about 2500 dollars per household, an increase on the sales tax impacts these people. Perhaps a low-income sales tax credit could level the field a bit.

Believe it or not, there are actually working class people in Florida. Since Floridians spend on average 40% of their income on taxable items. Equal to about 2500 dollars per household, an increase on the sales tax impacts these people. Perhaps a low-income sales tax credit could level the field a bit.

What would level the tax field is a kinder assessment of who can pay what and assess accordingly. 😱

The Bay County Property Assessor is suggesting an easy solution of assessing all property at 40% of market value rather than the required 85%, which would bring immediate relief to all property owners in Florida. Mark my words, if something isn't done to correct the tax issue this year, there will be a tax revolt. If the market value of properties drops 35% from the 2005 values, the increase in millage rates will go up tremendously to keep the total revenue at the same levels for the County.

What would level the tax field is a kinder assessment of who can pay what and assess accordingly. 😱

"From each according to his abilities, to each according to his needs."

What is hard to understand about economic incentives?

Even though replacing my property tax with a sales tax would greatly benefit me, I oppose it. Someone with a home appraised at a million or so who now pays about $25,000 in property taxes would have to spend a $500,000 dollars a year with the additional 2% sales tax to offset the loss of property taxes.

Business owners would pay a disproportionate amount of taxes.

Wouldn't it be fairer to reduce the millage rates across the board?

This will not help the RE market - Second homeowners and investers will not like being the ones to pay the bill.

:cool: We already are paying the bill. I think it would help. I don't want to charge renters (the very few I have being across the street from the beach w/ no pool) any more than I already am.11.5%! Our property tax went from $750-$2300/year in 6 or 7 years! Where are they charging 14%? :shock: And insurance woohoowee! They charged so much we just got a refund check from the insurance co. being reviewed by the state! :clap_1:

Wouldn't it be fairer to reduce the millage rates across the board?

I disagree that reducing the millage rate will solve the problem. The real problem lies in the assessments and not the millage rate. The "Slaves of our homes" constitutional amendment has created enormous disparities in the assessments. The millage rate has gone down in Walton County and mostly benefited those who have been homesteaded for a long time.

Rolling back assessments to year 2000 levels would create a more equitable system.

Rolling back assessments to year 2000 levels would create a more equitable system.

now that i could live with.

I suspect the one thing that needs to be done is the most fair. The elimination of SOH would end the debate of inequality, and local governments would be held to more scrutiny regarding the collection of taxes and spending.

Eliminating SOH is difficult because it must be done by the voters and not the legislature. On top of that it would require more than a 60% vote. The only way I can see voters eliminating SOH is if they are voting to completely eliminate their property taxes.

I disagree that reducing the millage rate will solve the problem. The real problem lies in the assessments and not the millage rate. The "Slaves of our homes" constitutional amendment has created enormous disparities in the assessments. The millage rate has gone down in WaltonCounty and mostly benefited those who have been homesteaded for a long time.

Rolling back assessments to year 2000 levels would create a more equitable system.

Joe, I am not sure that I follow you point of the problem lying in the assessments rather than the millage rate. Will you please share some examples of how you think this to be true? If the millage rate is decrease substantially, and assessments remained at 85% wouldn't the effect be the same, or am I missing something?

Also, how did the decrease of somewhere around 1 mill benefit those people who have been homesteaded for a long time. I understand that the Save Our Homes Act has benefited these people greatly, but since their assessed values were capped long ago as for increases, 1 mill doesn't really add up to much. My thought was that it gave more benefit to the people who do not have homesteaded property.

Example - Property #1
homesteaded property from 1990 - Assessed at $100,000
1 mill reduction = $100
total taxes around 9 mills = $900


property #2 which is not homesteaded but adjacent to property #1
purchased in 2005 and assessed at $850,000 (just making up some realistic examples)
1 mill reduction = $850
total taxes around 9 mills = $7650

In the above examples, you can see the inequity caused by the Save Our Homes Act, which Joe and others mention. However, a millage reduction appears to benefit the non-homesteaded property owner more than the homesteader who purchased long ago.