How Would Portability Work Within Amendment 1?
Friday, January 18, 2008 12:28:47 AM
In part two of his look at Amendment 1, News 13’s Scott Harris explains how portability would work.
To understand portability, you have to understand how the Save Our Homes 3 percent annual cap works.
We’re going to work through a simplified example here.
Let’s assume you bought your home in 1994, the year Save Our Homes took effect. The Property Appraiser lists your new home at $100,000 market value, which is what you pay taxes on.
The next year, two things happen — the homestead exemption kicks in for you, which we will ignore for simplicity sake, and your Save Our Homes benefit begins.
Assuming a steady market value increase of 5 percent a year (the green line), the assessed value (the orange line) only goes up 3 percent.
Now in 2004, 2005, and 2006, the market prices jumped dramatically. The 3 percent cap saved homeowners a lot of money. Your savings are the difference between the two lines on the graph.
For example, by 2008 your market value is about $335,000. But because of Save Our Homes, your assessed value is only $150,000. Therefore you save the taxes on $185,000. Depending on your millage, or tax rate, that probably amounts to between $3,000 and $4,000.
If you were to sell your home and purchase a new one, you would lose that $185,000 benefit.
Your new home, taxable and assessed value will be the same for that first year, just like back in 1994. Your taxes are now based on the $335,000 figure (the brown line). The Save Our Homes 3 percent limit still applies for future years, but anytime a home is sold, the assessment resets.
You can see that the Save Our Homes benefit is more valuable the longer you stay in the same home. You can see why your neighbor who has the same house as you do, pays about half your taxes, because he bought it five years before you moved in.
So what does portability do?
You get to carry that $185,000 benefit with you to your new home. It’s “portable.” Your assessed value in your new home (shown in pink) starts at $185,000 below the market value, and the 3 percent cap continues for future years.
Remember your neighbor who is paying half the taxes you are? With portability, he’ll always pay half your taxes. Of course, you’ll always pay half the taxes of somebody who doesn’t buy a home in Florida until 10 years after you first bought a home.
Admittedly, there are a lot of details we ignored to keep this simple, but it should give you a framework to help understand the more detailed explanations that are on the various property appraisers’ Web sites.
As for Amendment 1 overall, read it yourself on your sample ballot or online.
Also, don’t wait and try to figure it out while you’re in the voting booth. Your fellow citizens waiting in line to vote after you will not appreciate it.