If more than 60% of Florida voters approve of property tax reform, homeowners around Central Florida and across the state will see annual savings of $1,000-plus on their bills, according to an analysis by the Orlando Sentinel.
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But voters will have to juxtapose desires for money in their pockets against warnings from city leaders, county officials and analysts across the political spectrum who warn the tax-slashing measure could upend public services, the structure of local government and the state’s economy.
The proposed rules apply only to primary homes, which account for about 47% of the state’s parcels. The measure creates a homestead exemption of $250,000 in 2028 after a first-year phase-in, up from the current $50,000 cap, but leaves school taxes unscathed. That means if it passes this November, the bulk of most tax bills would fund public schools.
Today, property taxes are the primary funder for far more – including police and fire protection, parks, libraries, roads, trails and other amenities taxpayers expect from their cities and counties.
But how substantial will the savings be? According to calculations by the Orlando Sentinel – reviewed by area tax experts – homeowners in the city of Orlando could expect to see savings of $2,328, the highest of Central Florida’s five largest taxing authorities.
An Orlando homeowner whose property is assessed at $300,000 would have a bill of $2,355, down from $4,683, using the existing rates. That’s about a 50% decrease. Of that reduced bill, about $1,850 would go toward Orange County public schools, with the rest going mainly to the city and county governments.
The savings remain the same regardless of the value of your home, if it’s above $250,000. But on a $300,000 home, the break accounts for about 50% of your bill, while on a $500,000 home, it’s about 28%.
In Orange County, a homeowner would save $1,972 on their tax bill – a 46% savings on a $300,000 home and a 26% cut on a $500,000 home.
Lake County homeowners would receive the smallest break in the region, worth about $1,473, or about 42% of the tax bill on a home with an assessed value of $300,000.
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The reasons for those geographical differences have to do with how much homeowners in each jurisdiction are currently taxed. The higher your overall tax rate now, the more you save.
Figures will vary within counties, because of city and special district tax rates, so for consistency most of the Sentinel’s calculations are based on those who live in unincorporated parts of Central Florida. Special district taxes cover things like hospitals, various lakes, water districts and other needs.
The Tax Foundation, a D.C. based pro-business think tank, warns that the plan, while putting more money in homeowner’s pockets, will likely lead to them spending more money elsewhere. For instance, it could force state and local governments to raise other taxes to cover the cost of services they choose not to scale back or eliminate.
“Substantially reducing or eliminating property taxes on most primary residences would not eliminate the need to fund local government services,” according to the foundation, a pro-business group, warning it could lead to increases on non-homesteaded property taxes or a sales tax hike. That could mean businesses pay higher taxes so homeowners can pay less.
“While a proposal to phase down property taxes on the primary residences of Florida homeowners may grab headlines, it risks severely undermining the competitiveness of Florida’s overall tax structure and leaving the state worse off,” the group said in a blog post.
Gov. Ron DeSantis has maintained he doesn’t think such tax hikes will be needed, and has hammered cities and counties to cut their budgets, which have ballooned over the past six years as spiking property values have boosted tax revenue.
“My question is there anything else that can be proposed that would actually deliver thousands of dollars in savings every single year to taxpayers?” DeSantis asked. “I haven’t seen it. So if you’re looking at helping people afford to be able to live and prosper, the property tax is the best game in town to be able to help with that.”
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