TAX AMENDMENT Q&A
by
Nicholas Azzarra

***REPRINTED COURTESY OF THE BRADENTON HERALD
(FROM ITS FEBRUARY 3, 2008 EDITION)

The overwhelming majority of Florida voters wanted some tax relief when they approved Amendment 1 a few weeks ago.

Now you probably want to know when you'll start noticing your savings.

Three of the four provisions set forth in the amendment were enacted automatically and immediately. Here's a closer look at how Amendment 1 may affect you.

What do I have to do to get my extra homestead exemption?

Nothing. The additional exemption will be calculated by the Property Appraiser's Office. You should notice the savings whenever truth-in-millage notices are mailed in August. The added exemption applies to non-school taxes, which make up less than half of the overall property tax bill in unincorporated areas. Instead of a doubled exemption of $50,000, it'll probably be closer to a $40,000 exemption.

When will I know how much money I'm saving?

Probably not until this summer. Schools, cities and the county all set millage rates, which determine how much you'll pay on your property tax bill. But first, dipping countywide property values have to be finalized so the taxing authorities can set millage rates accordingly. Statewide estimates projected an average $240 savings for most homeowners, but if school taxes are raised to offset Amendment 1's effect on education, you might not save as much.

I voted for Amendment 1 for its portability. How do I keep my savings now?

Portability takes effect immediately and is retroactive for one year. If you moved within the county or the state last year, and were able to get homestead status before Jan. 1, you're eligible. If you moved before that date but still haven't gotten your homestead exemption, you have until March 3 to do so before missing your chance to get portability savings. There were 3,900 new homesteads this year and 1,300 of those are probably eligible for transfers, according to the Manatee Property Appraiser's Office. First-time homebuyers and out-of-state transfers are not eligible for portability savings." If homeowners got a new homestead in '08 and they abandoned one in '07, they can transfer their savings," said Dale Friedley an analyst with the Property Appraiser's Office. "It doesn't matter what county they're coming from."

How much of my homestead savings can I take to my new home?

That depends on the value of your new home. If you're downsizing, or moving to a lower valued property, you can only take a percentage of your homestead savings to your new home. If you're moving into a higher valued home, you'll be able to take your entire savings with you. To calculate your portability savings, take the assessed value on your old property and divide it by its market value. Take the resulting percentage and multiply it by the new home's market value to get your new savings.For example, if a landowner's old home was valued at $400,000 but was being taxed on $300,000, his savings would be 75 percent. If he buys a $200,000 condo, he'd multiply that by 0.75 to come up with a new taxable value of $150,000.

I'm a business owner. How can I qualify for the new $25,000 tangible personal property exemption?

You'll have to fill out an application with the Property Appraiser's Office this year. After you've filed for the exemption once, you won't have to reapply in future years.

I'm a snowbird. How does Amendment 1 help me?

The new tax code has a built-in buffer against the meteoric property value jumps of a few years ago. Now, businesses and second-homeowners are protected by a 10 percent cap. That cap is the only provision of Amendment 1 that doesn't take place immediately. Those owners will have to wait until next year for the cap to go into effect. But slumping property values around the state are a good indicator that you won't need the 10 percent cap anytime soon.

Would anything keep me from getting my savings?

There's talk of a legal challenge of the portability provision of the new amendment. Some attorneys say that portability is unfair to out-of-state buyers and goes against American citizens' "right to travel" established by numerous U.S. Supreme Court decisions. Voters made their voices heard on Jan. 29, but the courts may have the final say on Amendment 1.

What local services are going to be cut?

It's too soon to tell. Local governments might have to raise millage rates to offset sagging property tax revenues, but that will be a dicey proposition in an election year (Four of the Manatee's seven county commissioners are up for re-election). County and municipal officials have said they'll cut public safety and welfare budgets last. But non-essential expenses, like funding for parks, libraries and social services, will likely face the cutting floor.

© 2008 Bradenton.com and wire service sources. All Rights Reserved.