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No property taxes? A homeowner’s dream or a fiscal nightmare? It could be a reality in Florida if some lawmakers have their way, according to The Wall Street Journal.
Homeownership has become increasingly difficult in Florida, where median prices have tripled and even quadrupled in some major metro areas since 2012. Republican Gov. Ron DeSantis is a major proponent of real estate tax reform, urging action from the legislature in his recent State of the State address.
“Is it your property or not? Just for being on your property year after year, you’ve got to write a check to the government every year,” he said. “So you’re basically paying rent to the government to live on your own property.”
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He’s not the only one expressing outrage. State lawmakers have filed dozens of bills on the issue.
“People are getting crushed not just by home insurance but by property taxes,” GOP state Sen. Jonathan Martin, who is sponsoring a bill that would require a study on the elimination of property taxes be completed by October, told the Journal. “That American dream in Florida is taking five figures a year in local taxes.”
Statewide property taxes vary, with the average homeowner paying 0.79% of their home’s assessed value. For a home assessed at the state average of $385,000, this amounts to a tax bill of $3,041. According to Florida’s Office of Insurance Regulation, insurance costs range from over $3,000 to $7,000 per year, depending on your county. This makes the cost of home ownership, even before a mortgage payment has been made, overwhelming to many homeowners.
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Property taxes help pay for state services such as schools, safety, open space maintenance, street maintenance, sanitation, and other services. Florida has been attractive for many people to move to because of the lack of personal income tax. Removing property taxes would make the state more reliant on sales taxes.
A study from the Florida Policy Institute estimated that sales tax would need to be doubled to 12% if property taxes were eliminated. Palm Beach Post opinion writer Frank Cerabino does not think DeSantis is serious, chalking his tax talk down to “empty political posturing.”
John Tillman, the CEO of the American Culture Project, a non-profit organization dedicated to tax and funding disclosure purposes aligned with Republican causes, wrote in the Tampa Bay Times that Floridians would find it “easier to buy a home because low or no property taxes make homeownership easier to afford. And businesses would be able to give wage hikes and grow, while a new generation of entrepreneurs would find it easier to get off the ground.”
The Florida Policy Institute does not think removing property taxes is remotely viable, writing:
“In a densely populated state like Florida, if policymakers wanted to eliminate property taxes, they would need to raise $43 billion (or $2,015 per capita) to maintain public services currently funded with property tax revenue.”
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Complaints against property taxes are nothing new. Many states have discussed trying to replace them. However, the issue is more acute in Florida because of its large retiree population with a fixed income who may have paid off their homes but cannot afford to keep up with ever-increasing property taxes. There are currently exemptions available to people aged 65 and older in Florida who earn a certain income and have lived in their homes for 25 years or more, but that also excludes many people.
Should property taxes be eliminated in Florida, it would be the first state in the U.S. to do so. However, it’s unlikely to happen anytime soon, as it would require a constitutional amendment and a vote, which is not guaranteed to pass, as many Republicans are also skeptical of the move.
“The question is what will replace personal property taxes,” state Sen. Don Gaetz told The Wall Street Journal. “I have not seen any proposal that eliminates property taxes, replaces them with a fairer or better tax and ensures that local governments will still have the funds to operate efficiently.”
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This article Florida Considers Ditching Property Taxes As The Cost Of Home Ownership Soars originally appeared on Benzinga.com
