Florida's Housing Market Value Could Plunge Under New Bill
In an aerial view, homes sit on lots in a neighborhood on January 26, 2023 in Pembroke Pines, Florida.
A new bill signed by Governor Ron DeSantis on Friday could put a stop to swelling property values in Florida and reduce the property tax burden on homeowners currently struggling with ballooning housing costs, including skyrocketing insurance premiums.
House Bill 7019, which was signed by the Republican governor last week after previously being passed by the Republican-led state legislature, would introduce an increase in Florida's homestead exemption.
Under the current law, homeowners in the Sunshine State are allowed to lower the assessed value of their home by as much as $50,000 when they use that property as their primary residence and so reduce their property taxes.
Newsweek contacted Gov. DeSantis' spokesperson for comment by email on Wednesday morning.
The bill, which will be on November's ballot, will increase the exemption granted to Florida homeowners based on the rate of inflation.
Qualifying homeowners will receive an additional exemption of up to $25,000 on top of the $50,000, but the exact value will be based on the Consumer Price Index for All Urban Consumers (CPI-U). The additional exemption won't be applied on levies imposed by school districts, even if the bill is approved by voters.
By tying the exemption value to the CPI-U, the Florida legislature and DeSantis are trying to make sure that it stays relevant even if the cost of living should suddenly increase.
According to 2023 data from ATTOM Data Solutions, Florida's effective tax rate last year was 0.76 percent, about halfway between the highest (Illinois, 1.88 percent) and the lowest (Hawaii, 0.31 percent) rates in the country. As of the end of May, the average home value in Florida was $399,944, up 3.2 percent compared to a year earlier, according to Zillow.
So Florida homeowners paid an average tax of $3,039 on the average home value.
While the Sunshine State doesn't have the highest property tax rates in the country, its homeowners are already struggling with home insurance premiums four times higher than the national average.
It will be up to Florida voters to decide whether they're happy with a bigger homestead exemption that will allow them to reduce their property taxes. To pass, the bill—which will be presented in the form of constitutional Amendment 5, needs approval from 60 percent of voters. Renters are out of the bill's equation and will not experience any tax cuts.
Should the bill pass, the Florida government has already set aside funds to support counties that are expected to see a significant drop in revenues, as reported by NBC Miami.
Are you a Florida homeowner and/or voter? Let us know what you think of HB 7019 and why you'd support it in November or not at [email protected]
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