Amendment 4 - Amend property taxes
Property tax limitations; property value decline; reduction for nonhomestead assessment increases; delay of scheduled repeal
(1)This would amend Florida Constitution Article VII, Section 4 (Taxation; assessments) and Section 6 (Homestead exemptions). It also would amend Article XII, Section 27, and add Sections 32 and 33, relating to the Schedule for the amendments. (2) In certain circumstances, the law requires the assessed value of homestead and specified nonhomestead property to increase when the just value of the property decreases. Therefore, this amendment provides that the Legislature may, by general law, provide that the assessment of homestead and specified nonhomestead property may not increase if the just value of that property is less than the just value of the property on the preceding January 1, subject to any adjustment in the assessed value due to changes, additions,
(2)reductions, or improvements to such property which are assessed as provided for by general law. This amendment takes effect upon approval by the voters. If approved at a special election held on the date of the 2012 presidential preference primary, it shall operate retroactively to January 1, 2012, or, if approved at the 2012 general election, shall take effect January 1, 2013. (3) This amendment reduces from 10 percent to 5 percent the limitation on annual changes in assessments of nonhomestead real property.
This amendment takes effect upon approval of the voters. If approved at a special election held on the date of the 2012 presidential preference primary, it shall operate retroactively to January 1, 2012, or, if approved at the 2012 general election, takes effect January 1, 2013. (4) This amendment also authorizes general law to provide, subject to conditions specified in such law, an additional homestead exemption to every person who establishes the right to receive the homestead exemption provided in the Florida Constitution within 1 year after purchasing the homestead property and who has not owned property in the previous 3 calendar years to which the Florida homestead exemption applied.
The additional homestead exemption shall apply to all levies except school district levies. The additional exemption is an amount equal to 50 percent of the homestead property's just value on January 1 of the year the homestead is established. The additional homestead exemption may not exceed an amount equal to the median just value of all homestead property within the county where the property at issue is located for the calendar year immediately preceding January 1 of the year the homestead is established. The additional exemption shall apply for the shorter of 5 years or the year of sale of the property.
The amount of the additional exemption shall be reduced in each subsequent year by an amount equal to 20 percent of the amount of the additional exemption received in the year the homestead was established or by an amount equal to the difference between the just value of the property and the assessed value of the property determined under Article VII, Section 4(d), whichever is greater. Not more than one such exemption shall be allowed per homestead property at one time. The additional exemption applies to property purchased on or after January 1, 2011, if approved by the voters at a special election held on the date of the 2012 presidential preference primary, or to property purchased on or after January 1, 2012, if approved by the voters at the 2012 general election.
The additional exemption is not available in the sixth and subsequent years after it is first received. The amendment shall take effect upon approval by the voters. If approved at a special election held on the date of the 2012 presidential preference primary, it shall operate retroactively to January 1, 2012, or, if approved at the 2012 general election, takes effect January 1, 2013. (5) This amendment also delays until 2023, the repeal, currently scheduled to take effect in 2019, of constitutional amendments adopted in 2008 which limit annual assessment increases for specified nonhomestead real property. This amendment delays until 2022 the submission of an amendment proposing the abrogation of such repeal to the voters.
This proposal does three things: 1) provides an additional homestead exemption for first time homebuyers up to the full value of their home phased out over five years, 2) reduces the assessment cap on nonhomesteaded property from 10% to 5% and delays the expiration of that cap to 2023, and 3) removes the recapture provision of all assessment caps.
The proposed amendment would prohibit increases in the assessed value of homestead property if the fair market value of the property decreases; reduces the limitation on annual assessment increases to non-homestead property; and provides an additional homestead exemption.
Specifically, non-homestead or commercial property would have their assessment increases capped at 3 percent per year. The property tax rate would also be lowered to 10 percent for rental and 5 percent for commercial properties. According to reports, this will put non-homestead or commercial property owners in line with the benefit received by homestead owners.
Additionally, the measure would implement an additional homestead exemption for first-time buyers equal to 50 percent of the median home price in the county. The additional exemption, however, would be gradually reduced until it expires within 5 years.
Florida Business Watch stated that Amendment 4 will adversely affect local government budgets. If passed, Amendment 4 is expected to cost Florida's cities and counties more than $157 million in the first year. Because of the compounding nature of this tax change, the effect on city and county budgets will be well over $1 billion in the first 4 years alone. If you are attending the FCCMA Conference plan on joining us to learn the provisions of Amendment 4 and how it will affect your business dealings with Florida's local governments.
The Florida League of Cities and the Florida Association of Counties oppose this proposed change because it is expected to cost local governments (not including schools) over $1 Billion in the first four years and it will cause new challenges. Like Save Our Homes it will mean that businesses with identical properties will end up paying very different property taxes and hamper new business start up down the road.