With the housing market growing slowly, Amendment 4 adds possible tax breaks for first-time homebuyers, small businesses and owners of rentals and second homes.
At the same time, passage of this bill could mean higher taxes for Florida residents and massive cuts to local government.
The 700-hundred word proposal is the longest of the 11 amendments on Florida’s longest-ever ballot.
James Madison Institute, a Florida-based public policy research organization, said Amendment 4 groups different “features linked by the fact that they all deal with issues related to property taxes.”
Policy Director Robert Sanchez, at James Madison Institute, said, “This is not a good government process. Even though one might be desirable, others may not be. They should be on their own merits.”
Of several elements that make up the amendment, capping the rate of increase on non-homestead property such as businesses and rental properties is the major focus.
Another is the repeal of the “recapture rule.” The recapture rule, introduced under the Save our Homes Amendment, caps property tax increases at 3 percent even if market value is depreciated. Lastly first-time home buyers could see additional homestead tax exemptions if they have not owned property in the last three years.
“Repealing the recapture rule doesn’t seem fair because it would make the inequities even worse under the Save our homes amendment,” Sanchez said.
Chief Deputy Doug Will, Leon County Property Appraiser, said realtors support the amendment because it could spur home buying.
He also said he can’t see it doing much because “young people [sic] ain’t got no jobs.”
According to www.vote411leon.org , amendment four would give an exemption that would phase out over five years and equal to 50 percent of the market value.
The current law caps annual increases on non-homestead property – a vacation home-at 10 percent. This amendment would reduce it to five percent.
The measure would also offer protection to owners of rental properties addressing the “increase of property-tax burden imposed on the owners of unprotected (non-homestead) property,” according to the fall 2012 James Madison Institute journal.
Sen., Mike Fasano, (R-Fla), backs the proposal by emphasizing that this is not just a one-time property tax break. Fasano also added the housing and real-estate markets were key to turning around Florida’s economy.
The Florida TaxWatch estimated the proposal would create more than 19,000 jobs, increase state gross domestic product by $1.1 billion, and boost personal income by $5.3 billion in 10 years.
However, the Florida Association of Counties takes a different view. Spokeswoman Cragin Mosteller said that the break for second-home owners is troubling because second-home owners make up the largest part of the amendment’s budgetary impact.
She referred to the amendment as a “cost-shift to year-round residents.
“We’re being sold a tax cut, but it’s just a tax shift,” Mosteller said. “Year-round residents have a lower tax burden, so if you lower the tax burden of our snowbirds, think about that seesaw. Year-round residents’ taxes have nowhere to go but up.”
The journal from James Madison institute states that local governments would suffer more than $200 million in revenue loss within the next year.
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