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Commercial real estate owners in Florida could collectively face a tax increase of several hundred million dollars unless a cap on non-homesteaded property is extended beginning next year.
Initially enacted in 2008 as part of a law that allowed for portability of Save Our Homes legislation and granted additional exemptions for homesteaded property, tax hikes on commercial and rental property and land was capped at 10% — but only for a decade. The provision in the law is scheduled for repeal on Jan. 1 or next year.
Now, Florida Tax Watch is cautioning that property taxes on commercial and rental property could go up a combined $700 million unless voters in November agree to extend the cap permanently. The amendment will require at least 60% of voters to agree to the extension by voting “yes” on Amendment 2, the group notes, to preserve what it calls an “important protection.”
In a new report, Florida Tax Watch warns that any tax hikes to commercial or rental property likely would be passed on to renters or tenants, which already pay more than 43% of all taxes in the form of property taxes.
As an example of the disparity that has grown in commercial property taxation vs. homesteaded property taxation, the group notes that a homesteaded property assessed at $200,000 in 2000 would pay roughly $4,200 in taxes.
By 2007, thanks to the state’s Save Our Homes’ provision that limits annual assessments to 3% or inflation, whichever is less, that same property would have been assessed at $237,483, but its property tax bill would have dropped by 3% to $4,075.
By comparison, a non-homesteaded commercial property assessed in 2000 at the same amount would have experienced a doubling — to $4353,888 — in its assessment over the same period, resulting in an 85.4% increase in its annual tax bill, to $7.789 by 2007.
Florida Tax Watch also notes that when total property taxes rose 113% statewide from 2000 to 2007, from $14.3 billion to $30.4 billion, the hike was borne “almost entirely” by non-homesteaded properties.
“Florida has an inequitable property tax system that disproportionately burdens renters, businesses and other non-homestead property owners,” Florida Tax Watch concludes.
“As long as property values rise, those inequities will continue to grow.”
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