Legislation Proposes Enhanced Transparency for New Homebuyers Regarding Property Taxes

Brevard County Property Appraiser Dana Blickley states that the most significant grievance she and other Florida appraisers encounter is the surprise faced by new homeowners upon receiving their tax bills. Often, they discover that their property taxes far exceed the amount paid by the previous owner, attributable to the “Save Our Homes” policy. This policy limits the annual increase in the assessed value of a Florida homestead to either 3% or the rate of inflation, whichever is lower.

Florida Legislature tax estimator

Pending legislation in the Florida Legislature introduces “tax estimator” bills aiming to mandate the disclosure of estimated post-sale property tax bills. Pinellas County Property Appraiser Mike Twitty, leading this initiative as the legislative chair of the Property Appraisers’ Association of Florida, expresses the desire to see it through this year.

Property appraisers assert that the positive growth in the Florida real estate market over the past 11 years has led to the most substantial benefits under the Save Our Homes cap since its inception in 1995. While advantageous for long-term homeowners, whose property taxes usually don’t escalate as rapidly as their home’s value, this has resulted in the most extensive “cap resets” for buyers of Florida residential real estate post-sale, particularly when the prior owner enjoyed homestead exemption and Save Our Homes cap benefits for an extended period.

Following the sale of a house, property appraisers are obligated to reset the capped assessed value to the market value of the home. This recalibration becomes the foundation for the new owner’s property taxes, contributing to a considerable spike for new buyers. For instance, in Brevard County, of the 6,770 homestead properties sold in 2022, the average taxes for the 2022 tax roll for the previous owner were $2,031, while the same properties averaged $4,652 for the 2023 tax roll for the new owner.

Who is affected from this tax bill?

The brunt of this increase is felt most by individuals relocating to Florida from other states and first-time homebuyers. Floridians transitioning their primary residence from one owned home in the state to another can often benefit from “portability,” enabling the transfer of Save Our Homes cap benefits from their old home to their new one.

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