If the new property tax cut package passes on January 29, here’s what it could mean. Homeowners in Central Florida will save an additional $226 from a higher homestead exemption, homeowners will be able to take their accumulated Save Our Homes tax break to their new home, and increases on taxes for owners of second homes and commercial properties will have the increase in taxes capped at 10% per year.
The best aspect of this new tax package will be the portability and accumulation of the Save Our Homes cap. If this tax package passes, this aspect will definitely increase the pool of home buyers in the state and could be a catalyst for a return of rising real estate prices.
Here’s a scenario provided by the Orlando Sentinel if you buy a more expensive home. You can apply your accumulated Save Our Homes tax savings to your new home. For example, assume your old home has a market value of $300,000, reduced to a taxable value of $150,000 by SOH. If you buy a new home for $400,000, it would be assessed for tax purposes at $250,000. This benefit is capped at $500,000.
Here’s a scenario provided by the Orlando Sentinel if you buy a less expensive home. If you trade down to a $200,000 condo, your savings would be figured on a percentage basis. Because SOH was worth 50 percent of your home’s value, the tax value of your $200,000 condo would be cut in half, to $100,000.
In both examples, you would also get a homestead exemption. While these tax savings sound attractive, one notable side effect from this tax package is that schools system will suffer a loss of $2 billion in revenue over the next five years.
More information on the property tax cut package can be found at the Property Tax News section of OrlandoSentinel.com.