property taxes in Dade City (Miami, Homestead: for sale, real estate market, vacation home)

[alle]

While on vacation my hubby and I visited Dade City. While checking out homes for sale on line we noticed that similar homes in the town with the identical zip code had widely varying property taxes. For example one home at $119,000 had taxes around $500 and another was at over $2000. This variation occurred at several price points. Can someone explain why?

[RMD3819]

Originally Posted by alle

While on vacation my hubby and I visited Dade City. While checking out homes for sale on line we noticed that similar homes in the town with the identical zip code had widely varying property taxes. For example one home at $119,000 had taxes around $500 and another was at over $2000. This variation occurred at several price points. Can someone explain why?

I'll try.

It probably has something to do with the save our homes amendment. This limits the amount your taxes can go up to 3% per year. It can be complicated and there are exceptions.

Let's say I live in Dade City and have been there for years. I bought the house for $50,000 and the house now appraises at $100,000. Throughout those years (since the SOH amendment passed) my tax increase has been limited to 3% per year, irregardless of what my assesed value has been.

Now you move in next door to me into a similar home valued at 100K. You are not covered by the SOH amendment so you pay taxes on the full assessed value.

The SOH is a cap to prevent residents from being taxed from their homes.

[alle]

Thank you for your reply. Makes me think FL may not be for us since selective taxation is actually allowed in home property taxes. So a retired person who has lived there a long time has a tax advantage over another retired person who moves in next door into a similar home and uses the same municipal services. Hypothetically the new person with the same fixed limited income could pay 4 times the amount of property tax. That's just crazy unfair and certainly discourages someone from moving to FL (maybe that's the idea?). Or else I'm not understanding it correctly?

[RMD3819]

You understand it perfectly. the current system benefits the long time residents. I don't care for the Homestead Exemption. There are homes in Florida valued at less than the exemption. These people pay no taxes yet receive the same services. I know a guy in such a position. He lives in a very rural area. His taxes for the entire year were $16. He had to pay that because not every tax is covered by the exemption.

Florida voters just passed an amendment in January that did two things:

-Increased the Homestead Exemption from 25K to 50K. This slices off 50K off your taxable value right off the top. You are not taxed on the first 50K on your home. This is only available to Florida residents. It is not available to those with a winter or vacation home, investors, etc.

-The SOH amendment is now portable. You can take your current "savings" with you if you move to another home within Florida. This was done to encourage the stagnant real estate market. People are trapped in their current homes as they can't afford paying the full taxes on a new home. There are limits to this poratbility and rules to follow in order to get it.

This is a good link:
Homestead exemption in Florida - Wikipedia, the free encyclopedia

I found the link to the official State Department of Revenue site helpful. Scroll to the bottom of that link.

[alle]

It's hard to believe that kind of tax discrimination is legal. Florida is definitely off our relocation list now as I can't abide being overly taxed like some kind of undesirable interloper to be financially exploited by the people already there. I guess one really can't move freely from another state to Florida. It's really too bad. Surely there could have been a better way to provide tax relief fairly.

[gypsychic]

Originally Posted by alle

It's hard to believe that kind of tax discrimination is legal. Florida is definitely off our relocation list now as I can't abide being overly taxed like some kind of undesirable interloper to be financially exploited by the people already there. I guess one really can't move freely from another state to Florida. It's really too bad. Surely there could have been a better way to provide tax relief fairly.

Florida isn't the only state - California does this as well. Not sure if there are others.

[rogerbacon]

Originally Posted by alle

It's hard to believe that kind of tax discrimination is legal. Florida is definitely off our relocation list now as I can't abide being overly taxed like some kind of undesirable interloper to be financially exploited by the people already there. I guess one really can't move freely from another state to Florida. It's really too bad. Surely there could have been a better way to provide tax relief fairly.

It's not just new people to Florida who are screwed by our unfair tax laws. I was born in Miami and have lived in Florida my whole life but I bought a house in 2007 and now I pay 8000 a year in taxes. Nothing like subsidizing the guy down the street who has the same house.

[doggiebus]

Originally Posted by alle

Thank you for your reply. Makes me think FL may not be for us since selective taxation is actually allowed in home property taxes. So a retired person who has lived there a long time has a tax advantage over another retired person who moves in next door into a similar home and uses the same municipal services. Hypothetically the new person with the same fixed limited income could pay 4 times the amount of property tax. That's just crazy unfair and certainly discourages someone from moving to FL (maybe that's the idea?). Or else I'm not understanding it correctly?

You got it. Those of us that have had our homes since before 2000 or so, are paying way less than someone that purchased later. This is why many people can't move. My parents want to downsize, and move to a cheaper area in North Florida. But their taxes will double for a house and lot that is a quarter the size of their current home, and so they are staying put.

[mommytwice]

Originally Posted by alle

It's hard to believe that kind of tax discrimination is legal. Florida is definitely off our relocation list now as I can't abide being overly taxed like some kind of undesirable interloper to be financially exploited by the people already there. I guess one really can't move freely from another state to Florida. It's really too bad. Surely there could have been a better way to provide tax relief fairly.

This law is now being challenged in court, and experts say it will very likely be struck down as unconstitutional under the equal protection clause and freedom to travel. Personally, I have been affected by the unfairness of that law. I live in a home very similar to all my neighbors, but since I have owned it for only 1+ years, my taxes are $6,600 while next door they pay $1,800 and across the street $2,500. Just like them, I have no children in public school (I pay for private schools) and use no government services. It is infuriating!!!!!!