JaxPoliticsOnline.com

Observations and musings on Jacksonville Politics

Existing Homeowner’s to suffer under Crist plan

Charlie Crist’s proposals to further reduce property taxes on the backs of local governments is running into a slew of opposition.  Apparently, a ranking of 47th in terms of overall tax burden is not enough for Gov. Crist’s future political ambitions.  He would rather cut educational spending and force college students to balance the state budget.

The Florida Association of Counties has announced their firm opposition and Orange County Property Appraiser Bill Donegan has joined their ranks.  Mr. Donegan, who stopped a similar 2007 proposal, says that his research shows that Crist’s proposals actually benefit new homeowners at the expense of existing homeowners.

“The inequities are going to be the new guys versus the old guys,” said Bill Donegan, whose research helped derail a statewide tax proposal in 2007. As Donegan sees it, Crist’s proposal would give first-time buyers in Florida an unfair tax break in an attempt to invigorate the state’s depressed real-estate market. Those first-time buyers would initially pay tax on only half the property value. Existing-home owners who sell their house and buy another, meanwhile, get a much smaller benefit: They can take along their Save Our Homes exemption, which limits annual increases in the taxable value of their homes to 3 percent.

Crist’s new plan, which needs legislative and voter approval, would limit the exemption for first-time buyers to $250,000 in property value. And it would be phased out over the first five years of ownership. Though the governor has yet to spell out fine details of the plan, at least one critic says the overall savings for first-time buyers make it unfair.

Consider a scenario developed by Donegan’s staff: A first-time buyer and a second-time buyer purchase identical $200,000 houses. Over five years, the first-timer pockets tax savings of more than $8,000. Thanks to portability of the Save Our Homes exemption, the second-time buyer sees a five-year savings of only about $6,500.

Advertisements

Filed under: Florida, Florida Politics, , , ,

%d bloggers like this: