More On Amendment 1

By Javier Gines:

2 FL leading newspaper have expressed their support for Amendment 1. You can read the following articles:

The Orlando Sentinel
Naples Daily News

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Crist Continues To Advocate Passage Of Amendment 1

TALLAHASSEE, Fla. – Jan. 14, 2008 – Governor Charlie Crist will spend a lot of time this week advocating passage of Amendment 1, the property tax reform proposal voters will consider on Jan. 29. The governor continues to visit families who will benefit from passage, and plans a promotional bus tour around the state on Wednesday.

“With a little more than two weeks before Election Day, the Yes on 1 campaign continues to gain momentum with new endorsements, our first commercial and several visits with homeowners across the state,” said Crist in a letter to voters. “You can expect to see more in the coming weeks … Support for Amendment 1 continues to grow and just (last) week the Construction Executives’ Association and the Florida Bankers Association joined several other organizations and associations supporting Amendment 1.

Other groups supporting Amendment 1 include:

• Association of Builders and Contractors
• Associated Industries of Florida
• Construction Executives’ Association
• Florida Association of Realtors
• Florida Bankers Association
• Florida Carpenters Regional Council
• Florida Chamber
• Florida Home Furnishings Association
• Florida Homebuilders Association
• Florida Manufactured Homes Association
• Florida Medical Association

The bus tour on Wednesday will cross the state with tentative stops planned in Volusia, Orange, Hillsborough and Lee Counties. For more information, visit the “Yes on 1” Web site at: http://www.yeson1florida.com

© 2008 FLORIDA ASSOCIATION OF REALTORS®
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Roll Tape On Property Tax Reform

Do you have questions about the new property tax reform amendment approved by Florida lawmakers? Get your answers directly from FAR Vice President of Public Policy John Sebree, who explains in video format how the proposed property tax reform amendment helps Realtors and homeowners. Please click here to see the 10-minute video posted on FAR’s Web site, floridarealtors.com

Still have a few questions? Call FAR’s Office of Public Policy in Tallahassee at 850-224-1400.

Florida Legislature Passes Property Tax Reform In Time For January Ballot

TALLAHASSEE, Fla. – Oct. 30, 2007 – It’s voters’ turn: The Florida Legislature passed property tax reform and a proposed amendment will appear on the January ballot. The amendment offers moderate relief for homeowners and slight relief for commercial property, but it does not go as far as an earlier House proposal. To become law, the proposal must still receive 60 percent of the votes in the Jan. 29, 2008, election.

The vote went down to the wire. Had the House and Senate not agreed by today, it would have been too late to get it on the January ballot, postponing any kind of tax relief.

“We are pleased the Legislature understood that missing the deadline for a January vote of the people was not an option,” says the Florida Association of Realtors (FAR) President Nancy Riley. “Tax reform is necessary to stimulate our economy. To put tax relief off to November 2008 would have been devastating to our state.”

The discussion included a number of considerations and not all made it into the final version. A complete breakdown of the individual considerations and how they fared in the final tax proposal is available in chart format at www.floridarelators.org under “What’s New.” Highlights of the passed legislation include:

• Double the homestead exemption, but only for homes valued at more than $75,000 and not for school taxes

• Allow owners of homestead property to transfer up to $500,000 in Save Our Homes benefits, including school taxes, to a new home

• Impose a 10 percent assessment cap on non-homestead property for the next 10 years. The cap does not apply to school taxes. After 10 years, voters will have the option to restore the 10 percent cap

• Allow businesses to exempt $25,000 in taxes paid on computers, office equipment and other personal property

With the deadline at hand, lawmakers had to quickly agree, and the final package represents a product that everyone could accept. The House, however, emphasized repeatedly that it would continue to work on property tax reform during the Legislature’s regular session next year, an opinion echoed by FAR.

While in favor of portability, FAR worries about including a portability provision without also adding some kind of relief for first-time homebuyers, a move promoted heavily but one that did not make it into the final version. Without any kind of first-time homebuyer protection, the U.S. constitution’s “right to travel” provision could be the basis of a court challenge.

© 2007 FLORIDA ASSOCIATION OF REALTORS®

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Florida House Passes Property Tax Reform Legislation

TALLAHASSEE, Fla. – Oct. 23, 2007 – The Florida House passed a bipartisan property tax reform package yesterday by a 108-2 vote that addresses many issues important to Florida Realtors. House leaders consider the almost-unanimous vote an indication of that legislative body’s dedication to the plan. It now goes to the Senate for consideration.

Prior to the vote, Florida Association of Realtors®’ (FAR) President Nancy Riley sent a letter to House Leadership indicating the association’s support for property tax reform, specifically applauding the inclusion of an assessment cap for non-homestead and commercial property owners. The 5 percent yearly assessment cap on non-homesteaded property (assessment retriggers upon sale) and commercial property (assessment only retriggers with “substantial” improvements) would apply to local government and school taxes.

“The House proposal regarding an assessment cap for non-homestead residential property and commercial property addresses many of the tax problems with non-homestead properties’ high yearly assessments and an uncertain tax bill from year-to-year,” Riley told House leaders, since many “non-homestead property owners are rethinking whether they want to invest in Florida.”

Another provision FAR leadership finds appealing is a guaranteed property tax break of 40 percent for homesteaded property or Save Our Homes savings. Homeowners would take advantage of the tax relief plan that saves them the most money. The 40 percent break would offer substantial and immediate relief to new homebuyers or those who purchased a home within the past few years.

“We are also pleased that both the Senate and House are advocating for “Save Our Homes” portability,” Riley says. “While not precisely in line with FAR’s stated position (local county option or a phase-out of ‘Save Our Homes’), this is mitigated by the House’s proposed assessment cap on non-homestead properties.” The House proposal includes statewide portability of property tax savings under Save Our Homes.

Other legislative highlights include:

• No doubling of the homestead exemption
• The Legislature will be allowed to change assessment methods for working waterfronts and affordable rental housing
• The Miami-Dade Property Appraiser must be elected, rather than appointed
• $25,000 tangible personal property tax exemption

The House bill, while covering many FAR goals, is still not the final word, however. “FAR will continue to promote property tax reforms in the areas of ‘highest and best use,’ presumption of correctness, value adjustment boards and assessment issues related to affordable housing and working waterfronts,” says Riley.

The Senate is slated to reconvene on Thursday. A Call-to-Action will probably be issued by FAR shortly, asking Realtors to contact senators, encouraging them to approve the House plan. The House and Senate must approve a bill by Oct. 29 to make it onto the Jan. 29 ballot.

© 2007 FLORIDA ASSOCIATION OF REALTORS®

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FL House To Consider Property Tax Plan

TALLAHASSEE, Fla. – May 11, 2007 – In an opinion piece published today in The Orlando Sentinel newspaper, Florida House Speaker Marco Rubio signaled a shift in the House’s approach to property tax reform, introducing the concept of a homestead exemption based on a home’s value.

During the regular session, the House, under Rubio, pushed a property tax reform plan that would get rid of property taxes for homeowners in exchange for a sales tax increase as high as 2.5 percent. Rubio says that proposal stemmed from three House goals: reduce local government taxing and spending, provide significant and immediate relief to taxpayers, and give Floridians statewide the opportunity to vote for meaningful and comprehensive property-tax reform.

However, Rubio also says the House “would support any plan that met those three goals and was more focused on the taxpayer than the tax collector.“During the past few weeks, Rep. David Simmons (R-Maitland) suggested an idea that met the House’s policy goals, and offered an opportunity for opponents of the House plan to reconsider their objections,” Rubio said in today’s editorial. “The House is now considering a variation of (Simmons) idea of dramatically increased homestead exemptions based on a percentage of the value of the home.”The system works similar to the IRS’s tiered income tax system.

All homes would have the same tax savings on the first $300,000 of value, for example, giving workforce housing the maximum deduction. But a home’s proportional property tax savings would go down for homes worth more. Rubio offers an example, which seems to be his preferred amount of tax shielding, though he also seems willing to negotiate with other House members as well as the Senate. In the opinion piece, his plan offers substantial savings to most Florida homeowners along with significant cuts to local governments’ coffers.

Rubio’s example calls for 80 percent of a home’s value to be shielded for the initial $300,000. On the next $700,000 of value, 70 percent would be exempt. Any home worth less than $1 million but more than $300,000, then, would be taxed at two different rates. Homes worth more than $1 million would pay proportionally more – a tax exemption of only 30 percent for the home’s value that exceeds $1 million, and a total property tax bill calculated using three different tax rates.

Examples using Rubio’s numbers:1. $300,000 (market value) home: 80 percent shielded from property taxes, making the taxable value $60,000. The county or city’s millage rate would then be applied to the $60,000 only.2. $1 million (market value) home: 80 percent shielded up to $300,000 as it was in example No. 1, for $60,000. That must be added to a taxable value of $210,000, calculated by taking the remaining $700,000 ($1 million minus $300,000), which has a 70 percent shield. Add $210,000 and $60,000 to get a total taxable value of $270,000.3. $3 million (market value) home: The two taxable values in No. 2 apply for the value of the home up to $1 million, for $270,000. Add that to $1.4 million, calculated by taking the remaining $2 million and shielding it by only 30 percent. $1.4 million plus $270,000 equals a taxable value of $1.67 million.

For homesteaded properties, the Save Our Homes amendment’s tax savings could go away, but Rubio claims that 90 percent of these homeowners would actually end up paying less in property taxes under the new plan anyway, and “the average beneficiary of this approach would see his or her tax bill cut in half.” Commercial and non-homesteaded property owners would be taxed under a similar approach under this idea. Rubio did not recommend a specific tax rate, but it would probably be higher.

According to Rep. Dean Cannon (R-Winter Park), head of the House’s committee charged with working out a property tax compromise bill with Senate leaders, the general concept of tying property-tax cuts to a percentage of property values “seems to be something that we both (House and Senate) have economic and philosophical support for.”Two key issues will impact any compromise, however – the drop in tax revenue local governments would be expected to absorb, and whether a tax increase elsewhere, such as sales taxes, would be needed to make up for any deficit. “If it’s such a huge revenue impact that we just have to go back to the drawing board and make up for it with sales tax, we’re going to have a difficult time coming together,” says Sen.

Mike Haridopolos (R-Melbourne) the Senate’s lead negotiator. Still, Haridopolos did not reject the plan altogether. Cannon says there is beauty in the methodology of a percentage-base property tax because “you can tailor it. … It doesn’t necessitate a replacement revenue source altogether. It also doesn’t rule it out, either.”

© 2007 FLORIDA ASSOCIATION OF REALTORS®

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Property Tax Relief

TALLAHASSEE –- May 4, 2007 – 4:13 p.m. –- Let’s start with the issue most on your mind: property tax relief. By now you’ve no doubt learned that the Legislature suspended negotiations on Save Our Homes portability, rollbacks and other property tax reform proposals until next month when lawmakers return to Tallahassee for a 10-day special session.

Several words come to mind.

Disappointing? Yes.

Derailed? No.

“We’re going home to continue to work on it,” said House Speaker Marco Rubio (R-Miami). “We would not call dates (for a special session)...unless we were confident that we would come up with something that would not just pass but work. But drafting something to go on the ballot (can't be rushed).''

House and Senate leaders called the special session Wednesday afternoon when it became clear that a deal couldn’t be worked out in the remaining 48 hours of the regular session. "The issue is too important to our state and to our taxpayers for us to give them a product they would not be proud of," said Senate President Ken Pruitt (R-Port St. Lucie) . "We have laid a great foundation." Pruitt noted that both sides have already agreed on two FAR-supported tax relief measures—$25,000 exemption on personal intangible property for small businesses and some form of Save Our Homes portability.

Details of the portability discussions were not released.30 days to talk the talkA one-month waiting period leading to a special session of the Florida Legislature gives Realtors an opportunity to meet their lawmakers locally and push for substantial property tax relief. It also gives lawmakers time to consider the focus exclusively on the issue.“It is my hope that a special legislative session devoted entirely to this issue will be able to deliver even more comprehensive tax reform than what could be negotiated in the waning hours of the regular session,” says FAR President Nancy Riley. “The Legislature will be able to roll back rates immediately and, if we remain strong, we will get our special election this year for portability and other constitutional issues that must be ratified by the voters.”

Special session at a glance:When: June 12-22Original House plan: Rollback taxes to 2001 levels; replace property taxes with a 2.5 percent state sales tax increase (constitutional amendment. Projected savings: $50 billion over five years.Original Senate plan: Rollback taxes to 2006 levels; allow for Save Our Homes portability; $25,000 exemption on intangible property; double the homestead exemption for first-time buyers. Projected saving: $14 billion.

What sources say has been agreed to so far: Cut property taxes by about $20-25 billion over five years; no sales tax increase; some form of Save Our Homes portability.How to send an email to your legislator: http://floridarealtors.org. Visit the Legislative Center.Progress report: Realtor issues advanced this sessionProperty insurance: Legislators made is easier for certain property owners to obtain insurance from Citizens Property Insurance Corp. and raised the ante for others. Citizens, the state’s insurer of last resort, is now Florida’s largest insurer with 1.3 million policyholders.

SB 2498 by South Florida Sen. Rudy Garcia (R) would allow property owners into the Citizens pool if the only insurance they could obtain on the private market was 15 percent more expensive than what they would pay Citizens. The current threshold is 25 percent.

The measure would also prevent private insurance companies from setting off their Florida operations in a separate, Florida-only company (known as PUP companies), and freeze Citizens rates through 2008; effective Jan. 1, 2009, Citizens would again be allowed to raise rates. Legislation passed during the special session on insurance last January freezes rates through the end of 2008.

Another bill, HB 7057 by Rep. Trey Traviesa (R-Tampa) , requires homes valued at over $750,000 and located in high-risk zones to install opening protections effective July 1, 2008, if they seek a building permit for work estimated at $50,000 or more. By Jan. 1, 2009, all homes valued at over $750,000 in high-risk zones must be fitted with opening protections to remain eligible for property insurance coverage through Citizens.

The goal is to “harden” homes insured by Citizens (which all policyholders in Florida support financially), thereby helping reduce some of the risk in the event of a devastating storm. The plan also calls for free inspections of 400,000 single-family homes and provides grants and loan to certain homeowners so they can make improvements that strengthen their home against storms. Housing trust funds.

More of the money generated by a portion of documentary stamp taxes for the William E. Sadowski Affordable Housing Trust Funds will be allocated to state and local programs. The state budget provides $393.4 million for housing programs — down from $433 million set aside last year but still $150 million more the cap imposed by the 2005 Legislature. Unfortunately, legislators failed to remove the $243 million cap on the funds, a move sought by affordable housing advocates, including FAR, citing a lean budget year.

On a related note, lawmakers approved HB 1375 by Rep. Mike Davis (R-Naples) , a long-time advocate of full funding of housing trust funds and other statewide affordable housing programs. Among other things, HB 1375 would require local governments to adopt by July 1, 2008 a workforce/affordable housing plan into the local comprehensive plan. Failure to do so would prevent the local government from receiving state housing grants.

More staff positions at the Division of Real Estate. The state budget also appropriates money for seven new employees at the Division — four full-time and three part-time. This should go a long way toward improving services to Realtors and protecting the public. Also approved this session:• SB 2234 by Sen. Steve Wise (R-Jacksonville), which requires home inspectors, mold remediators and mold assessors to be licensed by the Department of Business and Professional Regulation. Effective July 1, 2010, if signed by the governor.• HB 1277 by Rep. Pat Patterson (R-DeLand), which limits the financial penalty a landlord can collect when a tenant breaks a lease to two months of rent. The bill only affects leases of less than a year.

Effective immediately if the governor signs it.• HB 7163 by Rep. Carlos Lopez-Cantera (R-Miami) which allows real estate licensees to earn 3 hours of CE credit for attending a Florida Real Estate Commission meeting. Effective immediately if the governor signs it.• SB 1824 by Sen. Mike Fasano (R-New Port Richey) , which places numerous disclosure and education requirements on mortgage brokers and lenders to help protect consumers during the mortgage loan application process. More importantly, the bill includes additional enforcement and investigative tools for prosecuting mortgage fraud. Effective Oct. 1, 2007, if signed by the governor.• HB 111 by Rep. Bill Galvano (R-Bradenton) , amends the definition of “primary title services” and “related title services,” and codifies a civil court case that permits a portion of a title insurance premium to be rebated. Effective Oct. 1, 2007, if signed by the governor.

© 2007 FLORIDA ASSOCIATION OF REALTORS®

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2007 Florida Legislature Real Estate Issues

TALLAHASSEE, Fla. – May 4, 2007 – And so it ends. This year’s regular session wraps up today, and while lawmakers could stay late, it’s just as likely that they’ll disband earlier. While the state’s high-profile real estate issue – property tax reform – has been postponed until June, a handful of real estate-related proposals moved forward yesterday.

State Budget

Gov. Charlie Crist now has the state budget in his hands. While funding impacts all Floridians in different ways, two budget items specifically benefit the real estate industry. First, it appropriates money for seven new employees at the Division of Real Estate – four full-time and three part-time – which should go a long way toward improving services to Realtors. Second, more of the money generated by a portion of documentary stamp taxes for the William E. Sadowski Affordable Housing Trust Funds will be allocated to state and local programs. The state budget provides $393.4 million for housing programs – down from $433 million set aside last year but still $150 million more the cap imposed by the 2005 Legislature.

Home Inspectors

A built that creates a system for regulating home inspectors is also now on the governor’s desk awaiting a signature or veto. SB 2234 requires home inspectors, mold remediators and mold assessors to be licensed by the Department of Business and Professional Regulation (DBPR).Property insuranceA comprehensive law to reign in the skyrocketing cost of property insurance passed during January’s special session, and this session’s insurance law fine tunes some details and makes other changes. It now awaits Crist’s approval. Many of the revisions clarify provisions in HB 1A to avoid unintended consequences.

Property Taxes

A comprehensive solution to high property taxes has been deferred, but a move to expand Las Vegas-style slot machines in Broward County is on its way to Crist. Officially, they’re called video lottery terminals, an electronic version that plays similarly to bingo. The move could raise as much as $1 billion for the state, which would be used for schools, lowering the property tax amount allocated to that cause. It’s unclear whether Crist will sign the bill. He’s a fan of lower property taxes but generally opposes gambling.

© 2007 FLORIDA ASSOCIATION OF REALTORS®

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