Property Tax Reform

The Association supports sustainable property tax relief that does not inhibit the delivery of critical local public services.

Over the past approximately three years Florida’s counties (as well as other local units of governments) have endured numerous changes to laws directly affecting their respective, if not primary, most assuredly very significant sources of revenue, ad valorem (property) taxes. There have many recent changes to Florida property tax legislation. Some of which include:

• Mandatory reductions in County millage rates for FY 2007-2008.
• Millage rate caps with voting requirements for FY 2008 – 2009 and beyond.
• Permanent reductions in taxable value base through the implementation of Amendment 1 which included:
  • $25,000 increase in homestead exemption.
  • 10% Assessment cap on non-homestead property.
  • Portability of “Save our Homes’ differential.
  • $25,000 exemption of tangible personal property.
• Property tax assessment modifications for conservation purposed properties, working waterfront properties, and improvements made for reduced energy consumption.

As a result of the 2009 legislative session, Florida’s counties will be required to continue to adapt to further changes to existing property tax laws.

Conservation Lands

During the 2009 Legislative session, HB 7157 by the Finanace and Tax Council and Rep. Bogdanoff (CS/CS/CS/SB 2244 by Sen. Altman) was passed and signed into law on June 10, 2009 by Governor Crist.

This bill implements the conservation lands constitutional amendment passed by the voters last fall. It provides a full property tax exemption for land dedicated in perpetuity and used exclusively for conservation purposes. It provides a partial property tax exemption for conservation land that is used for commercial purposes, such as agriculture. Parcels of land less than 40 acres do not qualify for the tax exemption, unless the Acquisition and Restoration Council (ARC) within the Department of Environmental Protection (DEP) determines that the land will fulfill a clearly delineated state conservation policy and yield a significant public benefit. The bill also provides for a property tax assessment, similar to the current agriculture assessment, for conservation lands that are dedicated for a period of years only, rather than in perpetuity. The bill requires the Legislature to offset the reductions in property tax revenue experienced by fiscally constrained counties. FAC worked to minimize the potential for abuse, protect fiscally constrained counties, and ensure that the final bill language was not overly broad. The law shall apply to property tax assessments made on or after January 1, 2010.

Reduction in Non-Homestead Value Cap (10% to 5%) & First Homebuyer Homestead Exemption

During the 2009 Legislative session, CS / SJR 0532 by Sen. Lynn (HB 0097 by Rep. Domino) was passed. This bill proposes an amendment to sections 4 and 6, Article VII of the State Constitution that will create the following:

1. An additional homestead exemption for first-time homebuyers (persons who have not owned a principal homestead residence in the previous eight years). The additional homestead exemption will be equal to 25% of the just value of a respective property but no more than $100,000. The amount of the exemption will be reduced each year after the first year by the greater of 20% or by an amount equal to the difference between the just value and determined assessed value of the property in a respective year after the first year
   1. If the amendment is approved by the voters the estimated negative impact on County revenues is approximately $13 million in 2011(LFY 2012), $28 million in 2012(LFY 2013), $44 million in 2013(LFY 2014), $49 million in 2014(LFY 2015), and $51 million in 2015(LFY 2016).
2. A reduction in the limit on the maximum annual increase in the assessed value of non-homestead property to 5% from 10%.
   1. If the amendment is approved by the voters, the estimated negative impact on local government revenues is approximately $78 million in SFY 2012, $144 million in SFY 2013, and $209 million in SFY 2014.

The amendment will be placed on the ballot for voter approval in 2010. If approved, the measures will become effective on January 1, 2011.

Property Tax Exemption for Military Personnel

During the 2009 Legislative session, CS/SJR 1302 by Sen. Gardiner (CS/HJR 0833 by Rep. Horner) was passed. This bill proposes an amendment to Article VII, section 3 of the State Constitution to provide an additional ad valorem tax exemption on homestead property for each person who:

1. Is a member of the United States military or military reserves, the United States Coast Guard or its reserves, or the Florida National Guard;
2. Who receives a homestead exemption provided in Article VII, section 6 of the State Constitution; and
3. Who was deployed during the preceding calendar year on active duty outside the continental United States, Alaska, or Hawaii in support of military operations designated by the Legislature divided by the number of days in that year.

The additional exemption would be equal to a percentage of the taxable value of his or her homestead property.  The percentage would be calculated as the number of days during the preceding calendar year the person was deployed on active duty.  The Revenue Estimating Conference (REC) determined that if the amendment would have been in effect for the SFY 2009 – 2010 approximate negative fiscal impact to property tax revenues would have been $13 million.

The amendment will be placed on the ballot for voter approval in 2010.  If approved, the measure will become effective on January 1, 2011.

Ad Valorem Assessment / Challenges

During the 2009 Legislative session, CS / HB 0521 by Rep. Lopez-Cantera (CS / SB 1006 by Sen. Fasano) was passed and signed into law by Governor Crist on June 4, 2009. This bill provides substantial changes to existing law regarding the valuation assessment of property by property appraisers and the related process for challenging such assessments. A summary of the changes is provided below:

1. The property appraiser now has the burden of proving that his/her assessments were performed in accordance with existing law. If this burden is met successfully, the property appraiser and the related assessment will retain a presumption of correctness.
2. A taxpayer now has the burden of proving by a “preponderance of the evidence” that the related assessment is excessive (the former standard of review was higher and required “clear and convincing evidence”).
3. When a property appraiser appeals a Value Adjustment Board (VAB) decision, the property appraiser now has the burden of proving by a “preponderance of the evidence” that the assessment established by the VAB is not adequate.
4. In VAB or court proceedings challenging the denial of an exemption or assessment classification, the property appraiser no longer has the presumption of correctness and the taxpayer must prove by a “preponderance of the evidence” the entitlement to the exemption of assessment classification.

Current estimates of negative fiscal impacts to local governments include approximately $157 million in LFY 2010 increasing to $693 million by LFY 2014. This bill is intended to become effective immediately upon being signed into law and shall apply to assessments performed in 2009.