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Amendment 1 To Save Homeowners $200 to $300
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Published: June 22, 2008
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TALLAHASSEE - Most homeowners will net a savings of $200 to $300 on average from this fall because of Amendment 1.
But beyond those small savings, Amendment 1 also will help offset a mandatory 3 percent property assessment increase the state is imposing this year.
"Had Amendment 1 not passed, countywide taxable value would have increased approximately $2.5 billion," said Tim Wilmath, director of valuation for the Hillsborough County property appraiser's office.
By adopting Amendment 1 in January, he said, voters lowered the total taxable value of property in Hillsborough by about $4 billion, from $87.3 billion last year to $83.3 billion this year.
A clearer picture of Amendment 1's impact on homeowners is coming into focus as the county property appraiser finalizes assessments.
Hillsborough County commissioners, meanwhile, are considering taxation and budgeting proposals for the coming fiscal year.
Homeowners will receive their TRIM notices of proposed property taxes in mid-August.
The second $25,000 homestead exemption provided by Amendment 1 will minimize the effects of the Save Our Homes' "recapture" provision, which would have boosted many homeowners' tax bills this fall.
Voters adopted the Save Our Homes Constitutional amendment in 1992 to limit annual rises in assessed taxable property value to 3 percent. Three years later, however, the state implemented the "recapture" rule, which requires assessments to rise either by 3 percent or the percentage change in the Consumer Price Index - whichever is lower.
This year, 3 percent is less than the change in CPI, so that's how much recapture will boost assessments - even for homes that have lost market value.
That assessment increase would boost most homesteaders' tax bills this fall, were it not for the second homestead exemption provided by Amendment 1. As it is, some owners of higher-priced properties will still see a slight rise in their tax bill, because the increase in their assessments caused by Save Our Homes will cost more than the second homestead exemption in Amendment 1 will save them.
Wilmath estimates that the "break point" at which recapture will cost more than Amendment 1 will save is around $630,000 in assessed value.
"I think recapture is ridiculous," said Senate Finance and Tax Chairman Mike Haridopolos, R-Melbourne. "The value of your property goes down, then your assessment should go down."
Haridopolos is among those who want to abolish recapture, convinced that it undermines the intent of Save Our Homes.
"But we just don't have the votes," he said. "It's frustrating."
Haridopolos said that he will continue pushing to repeal the rule.
But given the billions of dollars that local governments are losing now because of the effects of Amendment 1 and declining property values, recapture is unlikely to disappear soon.
Here's a look at the impact of Save Our Homes recapture and passage of Amendment 1 on two sample properties.
The calculations assume no change in 2008 from the 2007 millage rate, the proposal currently before the Hillsborough County Commission.
EXAMPLE ONE: Home at Average Value in Hillsborough County
Just Value: $153,000 - down 10 percent from $170,000 in 2007 because of a declining market
Assessed Value: $128,750 - up from $125,000 in 2007 because of the "recapture" provision in Save Our Homes
IF AMENDMENT 1 HADN'T PASSED:
Homestead Exemption: $25,000, same as last year
Total Taxable Value: $103,750, up from $100,000 last year
•Estimated Tax Bill Without Amendment 1: $2,103*, up from $2,027
BUT SINCE AMENDMENT 1 PASSED:
Homestead Exemption: $50,000, doubled by Amendment 1
Total Taxable Value: $78,750, down from $100,000
•Estimated tax bill with Amendment 1: $1,783*, down from $2,027
EXAMPLE TWO: High-end Hillsborough Home
Just Value: $675,000, down 10 percent from $750,000 because of a declining market
Assessed Value: $618,000, up from $600,000 because of the "recapture" provision in Save Our Homes
IF AMENDMENT 1 HADN'T PASSED:
Homestead Exemption: $25,000, same as last year
Total Taxable Value: $593,000, up from $575,000 last year
•Estimated Total Tax Bill Without Amendment 1: $12,020*, up from $11,655
BUT SINCE AMENDMENT 1 DID PASS:
Homestead Exemption: $50,000, doubled by Amendment 1
Total Taxable Value: $568,000, down from $575,000
•Estimated tax bill with Amendment 1: $11,700*, up slightly from $11,655 because Save Our Homes "recapture" cost more than Amendment 1 saved.
Source: Hillsborough County Property Appraiser's Office
*The second homestead exemption in Amendment 1 does not apply to the schools portion of property tax; this is reflected in the above calculations.
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