Thank you to my friends & readers who have surpassed 10,000 visitors! Amendment 1 is of interest and I’d like you to be educated on what benefits may apply when buying and selling Miami Beach real estate. Amendment 1 was passed by Florida voters about 6 months ago which assists seller’s in today’s real estate market by releasing the bounds & chains of adjusting property taxes when trading up (or down). By loosening tax related constraints, buyer’s and seller’s who stood to pay substantially more taxes when property changed hands. Sellers who enjoyed 3 percent property assessment caps and $25,000 homestead exemptions were finding themselves paying a higher rates on any new home they purchased, while buyers were shocked over their Truth In Millage notices which informed them of new assessed values from higher sales prices and higher taxes based on these new assessments.
Providing relief on both sides, state legislators put Amendment 1 into effect in January08. Also known as “Save Our Homes Portability,” this constitutional amendment was aggressively supported by our very own Governor Charley Crist and the Florida Association of Realtors. The new law allows homeowners to take or “port” their property tax cap with them when they move, while also doubling the previous exemption for most homestead properties to $50,000 (from $25,000). Amendment 1 changes the previous Save Or Homes property assessment cap by allowing the difference between the market and just value assessments to be transferred to new homesteads.
- Double Homestead Exemption.The current $25,000 homestead exemption remains: but a second $25,000 exemption is added for home value between $25,000 and $50,000. The second $25,000 exemption does not apply to school taxes. The portion of home values between $25,000 and $50,000 will still be taxed at all levels. Homestead owners will save about $240 dollars each year.
- Portability. Allow homeowners of homestead property to transfer up to $500,000 in accumulated Save Our Homes benefits, including school taxes, to a new home. If buying something more expensive, a homestead owner calculates the savings by subtracting the assessed value (taxable value) from the just value (market value). The amount of savings is then subtracted from the just value on the new home. In most cases, the $50,000 homestead exemption will also be subtracted. If buying something less expensive, the calculation changes and is based on the percentage of tax savings rather than a dollar amount. If the assessed value of the original home was 50 percent of the just value, the homestead owner would transfer that percentage to the new home’s just value. Portability is retroactive to January 2007. Did you Trade up or down last year?
- Impose a 10 percent assessment cap on non homestead property for the next 10 years.This cap does not apply to school taxes. After 10 years, voters have the option to restore this 10 percent cap.
- Allow busnesses to exempt the first $25,000 of the taxes they pay on computers, office equipment and other tangible personal property.
Is Amendment 1 changing the public mindset and fueling real estate growth here in Florida as a result of the change? You be the judge..Oh btw, if you haven’t subscribed to this blog yet, do it now! If you’d like new blog updates once available, you can be notified by email or by RSS feed (see upper left column) every time a new posting occurs. 1.888.38.DREAM
Either log on to your local government’s or municipality’s web site to learn about the specific taxation issues related to your city or county, or call your local property appraiser’s office to find out exactly how you will be impacted by this new law. Miami Dade Property Appraiser Info