Florida’s rising property values have many homeowners trapped in their current houses, unable to move because they can’t afford to pay the property taxes.
Because of Florida’s complicated tax system, next door neighbors often pay hugely different rates on similar houses. The inequity has gotten the attention of state lawmakers and the governor.
Two homes, side by side can be paying hugely different amounts in property taxes. Because the resident on the left has been there 10 years, their taxable property value has been capped at 3 percent a year. Which means the house next door that sold this year could be paying between five and ten times more in property taxes.
The difference has made people mad and gotten the attention of state officials, including Gov. Jeb Bush. “And anything that’s done in this regard should lessen the inequity of a neighbor, like kind people owning homes in the same neighborhood, one paying one tenth of the tax that someone else pays.”
The long-time homeowner could also be trapped by their low tax burden, unable to move to a smaller home because their property taxes would go up. One plan being discussed in Tallahassee is called portability. It would let people take part of their current tax savings to a new home.
State Rep. Carl Domino of Palm Beach County likes the portability idea.
“Your homestead is assessed at $225,000. You sell it for $300,000. The difference is $75,000. You take that $75,000 and when you buy a $500,000 house, deduct $75,000. So your tax base is $425,000.”
The search for a solution isn’t easy. Local governments worry about losing their tax base. But because so many people are so angry, lawmakers feel obligated to do something.
Even if lawmakers act this spring, voters will need to agree and it could take 18 months before you could move and tax a tax break with you.