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Florida's Amendment One - A Benefit to Homeowners
On January 29, 2008 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 key aspects of Amendment and how it might apply to you.
Part 1: Portability
The 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.
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. 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.
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