As the Property Appraisers for Florida’s three largest counties, we urge all voters to pay close attention to Amendment 2 on the upcoming November ballot. The amendment asks voters whether to make permanent a 10 percent limit on the annual increase in assessed value of a non-homestead property. A “yes” vote will avert a sudden and largely unexpected tax crisis for more than 530,000 residential and business property owners in Palm Beach, Broward, and Miami-Dade counties.
Most residential property owners in Florida enjoy the tax savings afforded by two $25,000 homestead exemptions. Business owners, rental property owners, second homeowners and part-time retirees whose permanent residence is in another state are not eligible for those exemptions.
For them, Florida voters approved a constitutional amendment in 2008 that placed a 10 percent limit on the annual increase in assessed value of a non-homestead property. Over the past 10 years, these property owners have enjoyed significant tax savings because of this cap.
What many people do not know is that the 10 percent cap on non-homestead property is set to expire at the end of 2018. If Amendment 2 does not pass, more than a half-million residential and commercial property owners in South Florida will shoulder a total tax increase of $422 million effective Jan. 1, 2019.
In Palm Beach County alone, 134,592 property owners will share the cost of an additional $66.3 million in taxes. In Broward County, 170,000 property owners share the cost of an additional $88.5 million in taxes and in Miami-Dade County, 227,680 property owners share the cost of an additional $267.5 million in taxes.
For many high-value commercial property owners, the prospect of such an increase may be barely noticeable. However, please do not think that this is a problem for someone else who can easily afford it.
Consider the ripple effect of a repeal of the 10 percent cap. Think about the rental property owner who raises rent to make ends meet or the small-business owner – your favorite produce stand, car repair shop or family-owned restaurant – who raises prices to cover the additional cost.
The owner of a duplex in a south Florida community forgot that the 10 percent cap was temporary and was surprised to learn that without it, the assessed value of his property will increase by 21 percent on January 1, 2019. In addition, his tax payment, compared to last year, will increase by 13.7 percent, or $654, rather than the $300 to $400 annual increases he has experienced from year to year with the cap in place. He prides himself on keeping the rental rates below average for the area so he can maintain good tenants, but admits that his ability to continue doing that will be hampered, if Amendment 2 does not pass.
Finally, consider Florida’s part-time retirees, many of whom are on fixed incomes, whose contribution to our local economy benefits us all year long. Can South Florida continue to attract part-time retirees, if the cap expires?
What is perhaps most concerning about the cap’s looming deadline is that many of the people whom it will directly affect are unaware of the cap and/or its expiration date. We encourage all voters to talk to friends, family, local business owners and the part-time retirees in your neighborhood about the importance of this amendment. If you are the owner of a non-homestead property, we welcome you to call our offices to find out how the repeal of the 10 percent cap will affect your property.
Source: Sun Sentinel article written by Marty Kiar, the Broward County Property Appraiser. He wrote this piece with Dorothy Jacks and Pedro Garcia, the property appraisers in Palm Beach and Miami-Dade Counties, respectively.