Florida legislators propose property tax cuts, Miami real estate

The rapid rise in property taxes is one of the "twin threats" facing the real estate market in the state of Florida. The other is property insurance, with rates climbing equally as fast if not quicker.

After a seemingly successful attempt to tackle the property insurance issue, legislators are now addressing the importance of dealing with the property taxes issues. Those property taxes reduction proposals will undoubtedly have a positive impact on a softer real estate market.

The newly elected Florida Governor Charlie Crist proposed to introduce a constitutional amendment Tuesday that would cut property taxes by almost $ 5 Billion dollars, therefore addressing a major issue voiced by Floridian tax payers. The proposed cut would bring the following changes:

• Homeowners would be allowed to "take" their property tax savings with them when they move to another home in Florida.

• Double homestead exemption allowing local governments to increase the current homestead exemption from $25,000 to $50,000.

• A cap the assessed value of non-homestead properties that would limit the tax growth rate to 3% or the rate of inflation, whichever is lower.

As a result, homeowner’s in the first year alone are expected to save over $200 million in property taxes. Tax savings are expected to be almost $1 billion by the fifth year. And businesses and renters, in the first yea, will save over $600 million in property taxes. By the fifth year, savings are expected to exceed $2.5 billion.

If passed these new tax and insurance reduction proposals are going to provide a great ease on Floridian’s which in turn will be a great stimulant for the local real estate market.

- Published by MLR Realty contributor Eric Harari