Could Property Taxes in Florida Be a Thing of the Past?
Florida isn’t just a back-to-back Stanley Cup winning state; it boasts some of the lowest average property tax payments in the country. And if Governor Ron DeSantis’ latest tax proposal sees the light of day, it may need another airport to handle the influx of aspiring property owners.
Governor DeSantis has proposed abolishing property taxes. That’s right. In a state that already doesn’t have an income tax, property owners could truly live in their own homes free of property tax payments. If this happens, it will make Florida the very first state to abolish property taxes.
How will the Sunshine State achieve such an ambitious goal? Read on to learn how it can happen and the possible effects on property ownership.
Florida Property Taxes
Like every US state, Florida residents pay property taxes. Florida uses a millage rate system which is designed to ensure equitable property tax treatment while providing local governments leeway in changing rates as needed to fit their budgetary needs. FL Homeowner Guide to Millage. Property taxes only go to the local level, providing funding for public schools and other local services. State of Florida.com | Florida Tax Guide.
Making Up Lost Revenue
Getting rid of property taxes requires local governments to make up for the lost revenue. According to FPI, it would take $43 billion in additional revenue from the state to provide sufficient funding, or $2,015 per capita. A Risky Proposition: Weakening Local Governments by Eliminating Property Tax Revenue.
One way Florida may try to make up the lost revenue is by increasing the state’s sales tax. A Florida Policy Institute (FPI) report found that if Florida replaces property taxes with consumption taxes, it will need to impose a 12% sales tax. However, a recent poll shows that this is unpopular among Floridians. Nearly 7 in 10 Florida Voters Would Choose Property Taxes Over a 12% State Sales Tax Rate, Poll Shows. FPI’s CEO believes it could disproportionately burden low and middle-income families. Given inflation and the rising cost of living nationwide, it is a plausible consequence of raising the sales tax. Other ideas for revenue raising include the reenactment of an intangible property tax, sales tax on luxury services, and even a circuit braker program designed to “cut” property taxes once they reach a certain threshold to avoid overloading family budgets. A Risky Proposition: Weakening Local Governments by Eliminating Property Tax Revenue.
Concerns With the Proposal
Getting rid of property taxes may not be all sunshine and rainbows, as experts point out numerous potential drawbacks. For one, they are deductible from federal income taxes, meaning Floridians could lose a large deduction. In addition, experts warn that without a cohesive plan in place, taking away property taxes could result in low to moderate income households paying even more in taxes relative to their earnings. Further, there is a risk that home prices will increase, potentially shutting out prospective homebuyers. Getting rid of property taxes may benefit current homeowners, but those looking to buy a home could find themselves facing a steeper hill to climb.
Not everyone shares the same concerns. Some say that getting rid of property taxes will help ease the burden on homeowners who are already struggling with high mortgage interest rates, condo fees, and insurance costs. Unfortunately, this concept hasn’t been tested by any other state. It remains to be seen how such a concept will truly impact property owners.
Struggling With Property Taxes in NJ?
Moving to the Sunshine State may sound enticing for New Jersey residents struggling to maintain their property tax payments, but it is not the only way to save on taxes. The Garden State offers several property tax relief programs. You can find ways to save thousands on your property taxes here: New Jersey Property Tax Relief | MROD.
Property owners shouldn’t feel stuck with high assessments. At McKirdy, Riskin, Olson & DellaPelle, P.C., we fight for property owners across the state to ensure that they pay no more than their fair share. Book a free consultation with one of our experienced attorneys to see if you can save on property taxes.
To read the full article on Florida’s property tax initiative, click here.
