TALLAHASSEE, Fla., June 14, 2007 – A property tax reform plan was approved by the Florida Legislature today, which will result in a reduction of up to $31.6 billion in property taxes over five years. Approximately 66% of the savings resulting from the plan will benefit homestead residential property. Projections show commercial property only receiving 8% of the reduction.
The plan has two components. The first part of the plan is a statutory change which will roll back local government property tax rates to yield 2006-2007 revenue levels. The plan then forces local governments to make an additional reduction between 0-9% determined by their “taxing performance” over the past five years measured against a statewide average. Going forward, increases in property tax revenue will be capped so they do not outpace increases in personal income and the caps can only be overridden by a 2/3 or unanimous vote of the local government governing body, depending on the size of the override sought. These changes will result in an estimated $15.6 billion reduction in property taxes over the five years.
The second component of the plan involves asking voters to approve a proposed constitutional amendment which will create a broader exemption on homestead property. The Legislature approved placing the amendment language on the January 2008 primary election ballot which would exempt 75% of the first $200,000 of a homestead’s value and 15% of the next $300,000 in value. If approved, this constitutional change could result in the additional $16 billion reduction over the remaining four years.