Trump this Florida Fix and Flip
Posted at 7:43 AM, Sep. 2, 2008
How’s the Florida real estate market doing? Well, if you ask Donald Trump, it’s doing just fine. He recently sold his modest 60,000 square foot Palm Beach home for a clean $95Mil. Maison de L'Amitie, is one of those fountain in the drive, white marble column, gold fixtures in the bathroom kind of places and is apparently one of the most lucrative Florida fix and flips in recent memory.
Before he put the house on the market, Trump had his apprentice, Kendra Todd renovate the property, do a little gardening and properly stage it. Though $95Mil is not the $125Mil Trump hoped to get, it sure beats the $41.35Mil he paid in 2004. Though the cost of the renovations isn’t known, that’s a cool $54Mil profit. Not bad for a four year real estate investment.
It could be however that all of the renovations were unnecessary. The guardian reports that Russian buyer, Dmitry Rybolovlev could care less about the trappings of the house. They speculate he bought it for the 475 foot stretch of prime Florida beach in the backyard. And why wouldn’t he? Anyone who lives here knows that Florida real estate will always be in demand because Florida beaches never go out of style.
Relocating to Tampa Florida? TampaHomes24-7.com is a one-stop source for all kinds of information related to the Tampa real estate market, including Wesley Chapel real estate.
Understanding Florida Real Estate Taxes with Florida’s Amendment 1
Posted at 2:06 PM, Jun. 30, 2008
Florida’s real estate tax laws can be tricky to understand. There are several factors which affect the size of your property tax bill, so if you’re buying property in Florida or are relocating, it’s important to understand how taxes are calculated.
Property values are in constant flux just as the real estate market is, so getting an accurate, current assessment is important. The assessed value of the property you buy may change dramatically when it changes hands, so it’s good to be aware of the factors that might influence how much tax you pay.
As well as market rates your real estate tax bill will also depend on the tax rate for different local government bodies. The property you buy will be subject to taxes from several different bodies, including county and city government, the school board, hospital district, and water district. There may be additional taxes if you live in a masterplanned community.
On the other side of the coin, homestead exemptions and the “Save our Homes” amendment help limit the amount of your property tax bill.
The amount you pay in county property taxes will, of course, vary depending on the value of your property. However, they’ll also vary depending on the tax rate in your county, and where in the county you live. This is because within a county, some regions are incorporated and some are unincorporated, and unincorporated regions tend to have lower property taxes. If you live in Temple Terrace, some areas of New Tampa or the City of Tampa, for example, you’ll likely be paying more in property taxes than someone living in Lutz or some portions of New Tampa, as the former locations are incorporated and the latter are not. Unincorporated areas generally are lower because they do not have “city” taxes.
Community Development District Tax
People living in a Florida masterplanned community or community development district will likely have additional taxes to pay. These extra taxes are what enable the developers of these communities to add extra amenities to enhance the lives of residents. By sharing the cost of community and land development among residents, additional facilities such as recreation centers, parks, walking trails, and sports facilities can be added.
Depending on the community, the tax may have two separate parts. One is a fixed amount that is payable for a fixed amount of time (usually no more than twenty years) – the bond portion. The second amount can vary from year to year depending on the needs and budget of the community. If you’re interested in relocating to one of these communities it’s important to find out how much residents are expected to pay each year, as the total varies widely depending on the community, the different villages within the community and the types of facilities and services the master planned community provides as a whole.
Note that the responsibility for paying these taxes is tied to the property, not to the owner. If the property changes hands, payment of community fees and taxes becomes the responsibility of the new owner. An owner does have to option to pay off the bond portion of the CDD for their property, thus reducing the amount owed yearly to only include the working capital needed to maintain the community.
Property Tax Homestead Exemption
Under the homestead exemption, all legal residents of Florida can deduct $25,000 from the assessed value of their primary residence. This essentially reduces the taxable value of the property, and reduces how much eligible Florida residents pay in property tax. Certain groups of homeowners, such as senior citizens, veterans, and the blind, may qualify for other exemptions.
The $25,000 homestead exemption is not granted automatically, however. To be eligible in any given year you must take possession of the homestead by December 31, and then apply for exemption no later than March 31 of the next year.
Since January 9, 2008, eligible Florida homeowners can gain a further $25,000 exemption under Amendment 1. This exemption is received automatically by any homeowner who applies and is approved for the original homestead exemption.
The second exemption is calculated as follows:
- The first $25,000 value of the home is the original exemption.
- The second $25,000 is fully taxable. This is necessary to allow Florida towns and cities where assessed property values are low to continue collecting the revenue they need to run local government.
- The third $25,000 is the new Amendment 1 exemption. It is exempt from all taxes except for school tax. This allows schools to continue receiving the funding they need (if this third portion was totally exempt, schools wouldn’t receive enough funding for their schools).
The "Save Our Homes" Amendment
The Save our Homes (SOH) amendment prevents annual property assessments increasing more than 3% or the percentage increase in the Consumer Price Index (whichever is lower). This guarantees any homeowner who receives a homestead exemption that the assessed (taxable) value of their property will not increase more than 3% per year.
SOH protects existing Florida homeowners, but if you’re buying Florida property and you are not a Florida resident and it is not your primary residence, SOH won’t apply to your purchase. The assessed value cap is lifted automatically when the property changes hands. It is important for new home buyers to rely on the current market value and not on the previous owners tax assessment as it is likely that the home will have an artificially low assessed value, especially if it’s been owned by the same person for a number of years.
Once you buy a home, you can apply for homestead exemption, and receive automatic SOH protection once the exemption is approved for the next tax year.
What does that mean? If you buy your home prior to December 31, 2008, you will have the benefit of whatever the prior homestead status is for your bill that tax year. Once the new year begins and providing you have applied by March 31, your new Homestead exemptions will be reflected in the following November’s 2009 tax bill. Remember taxes are paid in arrears.
“Save Our Homes” Portability
Amendment 1 has also changed the way SOH works. Under Amendment 1, SOH protection now has “portability,” meaning you can transfer a portion of your SOH benefit to a new homestead, if you meet the qualifying criteria.
Under the old pre-Amendment 1 system, a homeowner who had lived in the same homestead for several years had a substantial property tax benefit, as their home’s assessed value was capped. However, while they would enjoy lower property taxes, they were also more or less trapped in that home, as moving to a new homestead would mean a sharp increase in property taxes (as they would not be protected by SOH).
Amendment 1 has changed that by allowing Florida homeowners who receive SOH protection to transfer that protection to a new homestead. They must, however, apply for SOH within two years of purchasing the new property to be eligible to transfer the accumulated tax benefit to the new home. For example, a homeowner who gave up their old homestead after January 1, 2007, would have to claim for their new homestead by March 3, 2008 to be eligible for SOH portability.
The protection isn’t limited only to people who purchase new property. A Florida homeowner with multiple properties can transfer homestead status and SOH protection from one property to the other. However, because these protections only apply to a primary residence, they must also be willing to change their primary residence. There are stiff penalties for claiming homestead status on a property that is not your primary residence.
To apply for SOH portability you must apply for a new homestead exemption and also make a separate application to transfer the SOH benefit to your new homestead. You’ll need DR-501T and DR-501R application forms, which you can obtain from the Florida Department of Revenue web site and turn in to office of the county appraiser where your new homestead is located.
How much can you transfer? It depends on whether you’re moving to a house of greater or lesser value than the house in which you currently live. If it a home of greater value, you can transfer up to $500,000 worth of SOH protection from your original homestead. If it’s less in value, you can transfer up to 50% of the new property’s value in SOH protection.
Stay with me here…
Your current homestead has a value of $300,000 and SOH exemption of $150,000.
If your new property has a value of $500,000 you’ll receive portable benefits of $150,000.
If your new property is valued at $200,000 you’ll receive $100,000 worth of protection (in this case 150,000 of 300,000 is 50% - so you would apply the 50% to the new property value to arrive at your dollar amount of reduction of assessed value).
Assessment Cap for Non-Homesteads
Under Amendment 1, there is now an assessment cap for non-homestead property. This applies a cap of 10% on the assessment of both residential and non-residential property.
As of January 1, 2008, all non-homestead property will be assessed at market value only. However, the assessed increase from year to year is capped at 10%. In addition, the assessed value of the property cannot exceed market value.
Essentially, this means the assessed value of non-homestead property will be equal to market value. If a non-homestead property is appraised at $350,000 in 2008, it will be tax assessed at $350,000. If the property is capped at 10% cap in 2009, its assessed value could not increase above $385,000, regardless of market performance.
Non-homestead property owners can apply for this assessment cap in 2009.
Tangible Personal Property Exemption
The fourth Amendment 1 change is a $25,000 tangible personal property exemption. To qualify, business owners must file a TPP return by April 1 in the year in which they wish to apply. If you file and your TPP is less than $25,000 in value, there’s no need to file again unless your TPP value increases over that amount. Tangible personal property includes any owned and leased items used by a business.
Calum MacKenzie is Broker/Owner of Real Living Southern Homes a leading Tampa real estate company serving the Wesley Chapel FL real estate and New Tampa FL real estate markets.
Get Ready for Florida Hurricane Season
Posted at 1:10 PM, May. 29, 2008
Hurricane season is fast approaching for those of us living in Florida. With it comes the risk of heavy winds and floods that can do plenty of damage to our homes. It’s time to dust off disaster supply kits and make sure they’re full of all the supplies you might need, and make sure your family knows what to do in the event of a hurricane.
Your Family Disaster Plan
A disaster plan is simply an action plan that you’ll carry out if a hazard affects your home and family. It includes preparation activities you do before the hazard becomes a threat, and activities you might need to carry out during a storm or other emergency.
- Determine the types of hazards you might be affected by, and how your home is most vulnerable. Check out some ways in which you can minimize the risk of damage or safety threats during a storm.
- Check your insurance and make sure you’re covered for flood damage in some way (standard homeowner’s insurance rarely covers floods).
- Take classes in CPR, first aid, and disaster preparedness.
- Locate rooms or areas in your home which are safe from hurricane hazards. Generally this will be an interior room which has no windows.
- Determine escape routes from your home (these might vary depending on the hazard involved) and choose one or more meeting places where your family can gather if separated.
- Plan what to do with your pets if you have to evacuate your home.
- Choose a contact person—a friend or family member who lives out of state—that family members can contact if needed. Make sure you have at least two ways to contact that person (such as email, home phone, cell phone).
- Create and maintain a disaster supply kit, and make sure your family knows where it is and what it’s for.
- Check your disaster supply kit when a hurricane watch is issued and make sure you have all necessary supplies on hand.
- Discuss all of these issues with your family to make sure everyone understands what to do during a storm.
Creating a Disaster Supply Kit
A disaster supply kit is full of all the things you might need in the event of a storm doing enough damage that you lose your electricity supply or become isolated from the rest of the world.
When creating and maintaining disaster supply kit, it’s important to make sure that everything that goes in the kit stays in it. Don’t be tempted to remove items from the kit for any reason—it’s far too easy to forget to replace them. (Of course, you can use your own discretion when deciding whether or not to buy items such as blankets, pillows, and clothing especially for the kit.)
What should you include?
- Plenty of water—a good rule of thumb is one gallon per person per day, with at least three days’ worth for each person in the household.
- Enough food for three to seven days. Include only non-perishable food such as canned or dehydrated items, and also add some plastic utensils and paper plates, as well as a can opener and cooking implements.
- First aid kit
- Toiletries and personal care items
- Blankets and pillows
- Battery-operated flashlight and radio, and plenty of spare batteries
- Books and toys for you and the kids
- Important documents, including insurance policies, social security & bank account numbers, wedding and birth certificates. Keep these in a waterproof document sleeve.
- Tools (battery or hand-operated)
- Pet care items for any pets you own, including a leash and muzzle for dogs, and a cage or carrier for any small pets.
You may also want to have on hand items that you may need for emergency repairs if windows and other household fixtures are broken during a storm.
Some items, such as prescription medication and documents, won’t be a part of your disaster supply kit at all times, but you can gather these items when you hear of a hurricane watch and add them to the kit.
Store kit items in a safe and secure location, in water-tight boxes or bags, and make sure everyone in the family knows where your emergency supplies are located.
Some items may need to be replaced periodically even if you don’t use the kit—this includes batteries, and may include first aid and food items.
What should you do when a Hurricane Watch is Issued?
If a hurricane watch has been issued for your area, your actions will depend on whether or not you need to evacuate your home.
If you’re able to stay in your home, assemble your disaster supply kit and check for any items that need to be replaced. Stock up on any supplies you need, fill your car with gas, and grab some extra cash (in case ATMs and banks close). Carry out your pet plan, notify your contact person of the hurricane watch, and check up on your neighbors, too. If a hurricane does show up, gather your family in your home’s safe room, along with your disaster supply kit.
If you’ve been ordered to evacuate, or live in a vulnerable area, you’ll need to decide on a destination and inform family and friends (including your out-of-state contact) where you’re headed. Evacuate to the home of family members or friends in a safe area if possible, or try a motel or hotel in a safe location. Shelters will usually be a last resort, as these may be uncomfortable, and many don’t accept pets.
One of the worst feelings for family and friends is not being able to reach you and know that you are alright. Decide on one out of state contact and let your family and friends know ahead of time who that is and how to reach them.
Assemble your disaster supply kit, take care of your pets, grab extra cash, fill up your car’s tank, and secure your home. Before leaving, map out a route you’ll take to get to your destination—don’t get on the road until you know where you’re going and you have a safe route to get there. Be patient and leave as early as possible.
Calum MacKenzie is Broker/Owner of Real Living Southern Homes a leading Tampa Bay real estate company serving the Wesley Chapel FL real estate and New Tampa FL real estate markets.
Florida Home Inspections: Common Issues
Posted at 6:30 AM, May. 29, 2008
What’s the most important consideration when buying a home? Price, location, size? Most people won’t ordinarily think a home inspection is particularly crucial—it’s something that most of us do, but we don’t necessarily stop to consider just how important it is. The home inspection gives you a complete idea of what problems are present in the home, and what’s needed to fix them, so it is a vital part of buying a home.
There are certain problems that are commonly found in home inspections that, if left undetected, could mean thousands of dollars worth of repairs for an unwary home-buyer. In addition there are issues that are unique to states such as Florida, due to our distinctive climate. These are definitely worth paying attention to, particularly if you’re relocating from out of state and haven’t considered the problems that a warm, moist climate can present.
The Florida climate is absolutely brutal in terms of the damage it can do to wood and wood-based products. Regular maintenance of paint and caulking will eliminate 90% of the potential problems, but for many homeowners that maintenance just doesn’t get done.
Wooden doors without rain protection, siding in contact with grade, and poorly protected trim or siding are all vulnerable to water damage. Even stucco homes are vulnerable if stucco begins to crack and allow water access to the frame beneath. The damage done to wood framing on stucco homes can be huge, because the stucco hides what’s going on in the wood.
Application and regular maintenance of caulk and paint will prevent these issues (or help prevent them worsening if the home you buy is affected by water damage). Alternatively, consider whether you’d be better off with a masonry-built home with aluminum, stucco, and other materials in place of wood siding, framing, and trim.
Electrical problems are often caused simply by aging, damaged wiring, but that’s not the biggest problem your home inspection might uncover. More problematic than an older wiring system is the damage that a homeowner can do if they hire a non-licensed electrician, or even worse, do the work themselves without prior experience or knowledge.
Common issues found in these situations include exposed wiring without the necessary conduit protection, outlets with reversed polarity, junction boxes left open in attics or behind walls, double-tapped circuits, unsafe exterior wiring, and badly-constructed GFI outlets. Often, such issues arise when a homeowner decides to remodel their kitchen or bathroom, but fail to check out current code requirements. The result is that the modifications may not be up to code (this is more likely for older homes, as electrical codes have changed significantly in the past couple of decades).
Plumbing issues such as leaky faucets, water heaters, shower stalls, or toilets are common, but usually fixed fairly easily. A more significant problem occurs in the long term when water intrudes behind tiles, and shower or tub surrounds. These can be more costly to fix.
All these problems are easily avoided by sealing grout lines with grout or caulk, and repeating the application as needed. These simple measures can save thousands in unnecessary repairs and prevent the mold problems that often result, too.
Aging, Damaged, or Leaky Roofs
Florida’s climate and weather isn’t particularly friendly to roofing materials. Materials such as metal panels and concrete tiles will tolerate the weather as long as they’re installed properly and conform to manufacturer’s requirements. Shingles, however, are almost guaranteed to start taking damage soon after installation.
Harsh winds are part of the problem, but the main culprit is actually the hot Florida sun. In general, a shingle roof will last around fifteen years (even if it has a 20, 30, or even 40 year rating).
Roof failures are usually on the perimeters of the roof, or anywhere where the roof is penetrated, such as around chimneys, plumbing vents, or attic vents.
Air Conditioning Problems
Air conditioning issues might not be a big deal in all states, but people in Florida use their AC systems ten months out of the year—more than anywhere else in the country. Despite the fact that so many people rely on their AC so heavily, they don’t often get regular maintenance. In fact, the number one reason that AC systems experience problems is simply poor maintenance, rather than a mechanical failure.
Home inspections usually find leaking ductwork, dirty air handling coils or filters, and low refrigerant levels, any of which can lead to an inefficient, badly-running AC system. Changing filters regularly, plus annual servicing will keep your AC running well for a long time to come.
Problems in Low-traffic Areas
Those are the top five, but those aren’t the only issues a home inspector is likely to come across. Home inspectors don’t just take a tour of the most frequently-used areas of your home—they’ll want to look at attics, crawlspaces, and other hard-to-reach places that often get overlooked when it comes to maintenance. These unused places are all prime locations for termite and pest damage, water damage, plumbing, insulation, or electrical defects, structural damage, and HVAC problems.
Calum MacKenzie is Broker/Owner of Real Living Southern Homes a leading Tampa real estate company serving the Wesley Chapel real estate and New Tampa real estate markets.
Florida Homeowner's Insurance: Top Ten Ways to Save
Posted at 8:11 PM, May. 1, 2008
Homeowner’s insurance may soon be increasing for Florida residents—and even more for those living in the southern part of the state. This is the ideal time to check your policy and your home to see if you can cut your costs and make up for the rates hike.
1. One of the simplest ways to decrease your insurance premiums is to increase your deductible. This is true of most types of insurance, but few pay off as much as increasing the deductible on your home. Increase it to $2,500 and you could save hundreds of dollars every year.
2. If you’re looking at getting a new policy, ignore the new trend for online insurance shopping. In locations that are subject to special weather conditions, there called hurricanes in Florida, it’s always best to shop locally. Work with a local agent who deals with multiple carriers, and you’ll benefit by having an agent who does the shopping for you and can help you choose the best deal from among several carriers.
3. Choose an A-rated, admitted carrier. An A-rated carrier is more likely to remain financially stable in tough times, and an admitted carrier has state-approved rates and is covered by Florida’s Guarantee Fund. Both of these factors mean more security for your policy.
4. Ask your agent about their carrier’s renewal processing process, and find out if they requote the policy each year. Choose an agent that does requote every time renewal comes up to make sure you always have the best coverage at the best price.
5. If your Florida home was built before 2002, having it surveyed for wind mitigation factors could save you hundreds of dollars every year. This kind of survey documents design features in your home—such as FBC shingles and reinforced garage doors—that help it resist damage in high winds. In most cases you’ll save enough in the first year alone to cover the cost of the survey.
6. Storm damage is a big factor in Florida insurance rates, and one way in which you can keep your rates low is by owning a home with a hip roof rather than a gable roof. This type of roof diverts wind better than a gable roof does, and puts less strain on the house during high winds.
7. Make sure your home is within five miles of a fire station, and within 1,000 feet of a fire hydrant. If it’s too far away from either of these things, you may have to buy your insurance from Citizens, Florida’s state run insurance carrier, and means paying top dollar. As in the case of the hip roof, this tip might not help if you already own a home and plan to stay there long-term. However, if you’re looking to relocate it’s something to keep in mind.
8. Have your alarm system monitored. Overall you might not save money, but it more or less allows you to improve your home’s security for free, or close to it, as the amount you save on your insurance will typically cover the cost of having your alarm monitored.
9. If you have a diving board, a trampoline, or a dog of a dangerous breed, you’ll pay dearly for it with your insurance carrier. You may even find that conventional carriers aren’t interested in insuring you, and that means getting insurance from Citizens. You may not want to give up a much-loved family pet, but there’s no harm in questioning how much you really need a diving board.
10. Owning a property of five or more acres increases your insurance costs. In most cases you’ll need to buy a policy from a specialized carrier, which naturally costs more. However, if you don’t mind reducing your property a little, you can sell off an acre or two and reduce your premiums at the same time—reduce your land parcel to four acres or less and you’ll be able to shop around and reduce your costs.
Calum MacKenzie is a Tampa real estate agent with Real Living Southern Homes located Wesley Chapel, Florida. Visit Tampa Homes 24/7 to search the Tampa MLS.
Florida Property Insurance Changes will Affect Most Homeowners
Posted at 4:27 PM, Apr. 13, 2008
In the wake of Hurricane Katrina and other destructive storms, getting affordable property insurance hasn't been easy. Many private insurers shed high risk clients after storms in 2004-2005, and raised assessments for others. For those who could no longer afford private insurance (or who were declared uninsurable by private insurers), state insurer Citizens Property Insurance Corp is the last resort.
Over the last year, the state has been attempting to keep property insurance rates low for those who are insured with CPIC. According to critics of the latest property insurance changes, however, Florida residents who are insured by private companies will end up paying more so that the rates can stay low for those insured by the state-owned company. The last week of March saw the Florida Senate approve some changes to property insurance that might end up increasing property insurance rates by around 3%.
The bill was backed by Chief Financial Officer Alex Sink and approved by the Senate Banking and Insurance Committee. The intended effect is to reduce Florida's Hurricane Catastrophe Fund by $3 billion. This means the state can reduce its investment in CPIC and therefore reduce its risk.
At the same time, however, the state has also voted to freeze CPIC insurance rates through to the end of 2009. CPIC insures more than 1.3 Florida residents, and the rate freeze that occurred last year was done to avoid an increase that could have seen rates up by as much as 29%.
The problem is, according to critics, that CPIC's premiums aren't high enough, and that the company won't have enough cash reserves to be able to pay out claims if a major storm hits.
This is why the $3 billion reduction in the Hurricane Catastrophe Fund is significant. The Catastrophe Fund is a sort of safety net that can kick into action when Florida is hit by a major hurricane, and is intended to reimburse private insurers a portion of the money they pay out in claims. However, with the fund now reduced by $3 billion, the deficit is likely to be made up by rate increases for homeowners.
Last year, the state actually increased the Catastrophe Fund by $12 billion, but this year has been reduced by $3 billion. The fund was increased last year to reduce costs for insurers, and indirectly for homeowners. However, by increasing the Catastrophe Fund, the state of Florida was also increasing its own level of risk.
The state now wants to start decreasing its investment in the fund to reduce its risk. The net effect, however, will likely be the opposite of that which it originally intended. With private insurers taking on more risk relative to last year, the end result is more than likely going to be increased property insurance rates. The estimate is around 3% overall, with a slightly higher increase possible for Southern Florida residents.
Chief Financial Officer Alex Sink admits that an increase in rates is possible, but also says that if insurers try to increase rates to an unreasonable level, the state will step in.
Calum MacKenzie is the Broker/Owner of Real Living Southern Homes a residential real estate brokerage located in Wesley Chapel, Florida and serving the Tampa Florida real estate and Land O' Lakes real estate markets.
Florida’s Amendment 1 – What It Means to You
Posted at 1:18 PM, Mar. 6, 2008
On January 29, voters spoke loud and clear. Amendment 1 passed with nearly 65% of the vote – an astounding percentage. With the passage of Amendment 1, many people will be seeing some major changes in their tax bills. Are you one of them? Here’s quick rundown on the four sections of Amendment 1, what each section is, and how it might apply to you.
Part 1: Portability
he first part of Amendment 1 allows those who received a homestead exemption to transfer their Save Our Homes benefit to a new home under certain conditions. Under the old system, many people were “trapped” in their homes – unable to move because a move would mean a drastic increase in their taxes. The large increase in tax was due to the yearly 3% cap that a homesteaded property is privy to. So if property values increased more than 3% every year, a homesteaded property’s assessed value capped out at 3%. You can see that a homeowner that has resided in a home for a number of years would see a substantial tax benefit by means of a lower assessed value. Under the old plan, each time you purchased a new home, you lost any accumulated tax benefit from your old home and the assessed value reset to the market value of your new home.
Under the new amendment, you get to take your accumulated tax benefit with you as long as you apply it to another homestead within two years. A seller that had homestead exemption in 2007, and who either sold or abandoned their homestead in 2007 will be eligible to take their Save Our Homes benefit with them if they move to a new home in 2008 and apply for homestead portability. From 2008 onward, you can take your Save Our Homes benefit with you as long as you transfer it within the same year or the following year.
In order to receive this benefit, you must apply by March 1, 2008 to your property appraiser for your new homestead exemption and for the transfer of the "Save Our Homes" benefit to your new homestead for 2008.
In order to take advantage of portability, you have to make two separate applications – one for your new homestead exemption, and one to transfer the Save Our Homes benefit for 2008. You’ll find the application forms at:
Here’s a quick FAQ regarding portability:
How much is the portability benefit worth?
You can transfer up to $500,000 of portability benefit to a new homestead. If your new homestead is worth more than your old one, you transfer the dollar amount. If your new homestead is worth less than your hold one, you transfer the percentage. For instance: your current homestead is assessed at $300,000, but under Save Our Homes, $150,000 of that is exempt. If you move to a new home that is assessed at $500,000, your portability benefit will be $150,000. If you move to a new homestead that is assessed at $200,000, your portability benefit will be 50%, or $100,000.
Is the change of homestead and transfer of Save Our Homes automatic?
No. You need to apply for each benefit separately.
How do I apply for portability?
You simply turn in a completed application form to the office of the county appraiser in the county in which your new homestead is located.
Does portability only apply if I buy a new home?
No. If you already own a second property, you can transfer your homestead exemption to one property to the other and transfer the Save Our Homes benefit as well. Make note that your Homesteaded property must be your primary residence.
Am I eligible for portability this year?
If you filed to give up your old homestead after January 1, 2007 and are claiming a new homestead for 2008, you’re eligible, but you have to file your application for portability by March 3, 2008.
Part 2: Additional $25,000 Homestead Exemption
The second part of Amendment 1 is an additional $25,000 homestead exemption. The exemption is available to anyone who is already claiming the original $25,000 exemption. In order to claim it, you don’t have to do anything. It will automatically be applied to your 2008 tax assessment. In Hillsborough County, the average savings will be $250-300 per household. This is how it will be calculated:
First 25,000 of value – exempted from taxes
Second 25,000 of value – fully taxable
Third 25,000 of value – exempted from all taxes except the school taxes
Why isn’t the second 25,000 of value exempt? It is designed to protect cities and towns within Florida that may have many lower assessed property values, particularly in more rural areas. If the exception applied to the second 25,000 of value, many of these cities and towns would not collect enough revenue to run their local governments.
Why does the second 25,000 exemption still allow for the schools taxes to be collected? Simple answer is that the revenue is needed to fund our schools.
Part 3: Tangible Personal Property Exemption
According to the DOR:
Tangible personal property is all goods, chattels, and other articles of value. It includes: machinery, equipment, furniture, fixtures, signs, window air conditioners, supplies, leased, loaned, borrowed, or rented equipment used in a business, mobile home attachments on rented land (carport, screened porch, Florida room, etc.) furniture and appliances in rental properties.
The third part of Amendment 1 is a $25,000 exemption on all tangible personal property. Business owners must complete the TPP return and file it by April 1 each year. If it’s determined that your total tangible personal property is less than $25,000, you won’t have to file again. The first $25,000 of tangible personal property is exempt from taxation under Amendment 1.
Part 4: 10% Non-Homestead Assessment CAP
The final part of the amendment is a 10% limitation on assessment of non-Homestead property, both residential and non-residential. As of January 1, 2008, state law requires that all non-homestead property be assessed at just market value, and be reassessed annually, but the change resulting from the reassessment can not exceed 10% of the current assessed value, and the assessed value can not exceed the market value. In 2009, owners of non-homestead property will be able to apply for the 10% non-homestead assessment CAP.
In practical terms, that means that as of January 1, 2008, the assessed value of your non-homestead property will be equal to its market value. If your property is appraised at $350,000, it will be assessed at $350,000 for tax purposes. In 2009, if you apply for the 10% CAP, the property assessment can not be any higher than $385,000 – 10% above this year’s assessed value – no matter how much the market value increases. If the market value of the property is less than that, then the assessed value can be no higher than the market value.
You’ll find any forms needed to apply for the various exemptions at the DOR web site or at your county appraiser’s web site.
Calum MacKenzie is the Owner of Real Living Southern Homes a residential real estate brokerage located in Wesley Chapel, Florida and also serving the New Tampa real estate and Land O' Lakes real estate markets.