Possible Property Tax Law Change?
 

Thought this news item might be of interest...


TAMPA, Fla. (WFLA) — Florida lawmakers could eliminate all property tax and replace lost revenue through a consumption tax, according to the Florida Senate.

House Bill 1371, originally filed on Jan. 5, exempted $100,000 of the value of real property from being taxed. Those over the age of 65 would be qualified to be exempted from property tax up to $250,000.

Lawmakers would have to create rules, an application process, and documentation to prove age and property ownership.

In a revised version of the bill filed on Feb. 1, it states that the Office of Program Policy Analysis and Government Accountability is to study what the impact would be of getting rid of all property tax and replacing that lost money through a consumption tax. They are to submit their findings to the President of the Senate and Speaker of the House Representatives by Feb. 1, 2025.

The act will go into effect when it becomes a law.

Consumption tax = sales tax.

So the question boils down to do you want to pay your taxes with every non-food purchase or all at once.

A consumption tax would apply to tourists but I would expect a consumption tax that could replace property tax would be quite high - I would think at least 10% if not more - so paying about 18%+ sales tax would probably reduce tourism.

I remember reading that NYC tried that a few years ago with an enormous increase in hotel taxes - and they got less money because people stayed away from NYC. NYC then changed the law back. You don’t want to kill the goose!

Also, property taxes are very consistent year to year. If we had a recession, consumption would be reduced so taxes would be reduced so school and other government funding could have wide variations from year to year.

Consumption Tax: Definition, Types, vs. Income Tax - Investopedia:

"Consumption taxes are taxes on the purchase of goods and services. Examples of consumption taxes include sales taxes, excise taxes, VAT taxes, and taxes on imported goods."


What consumption taxes are not is a tourism or hotel tax except that tourists pay sales tax.

The state of Florida already has ample data on sales tax in economic down turns as well as boom cycles. It is not difficult to forecast. In other words, it is not difficult to fund everything with an increase in sales tax that was once funded with property taxes and do this in a way which does not result in school funding fluctuating sharply year to year.

Smoke and mirrors, shell game to raise taxes

Dead in the Water ! Too much County Income with Property Taxes ... Another Legislator Soliciting for Votes

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Sounds like a ploy to shift the funding of schools from the local level to the state level. New Jersey had this and eventually it turned into spending "other peoples money." Chris Christie attempted to shift the expenses back to the local level.
If cities/counties take care of their turf and provide a safe and affordable place for people to live, there would be no need to "spread the burden."

Is the proposal apply to "all" property taxes? Taxable value reduced across the board for everything based on value?

OR just reducing county taxes without lowering school taxes?
What about other taxes based upon value like fire?
Will the homestead exemption go away?

I’d be all for it if the proposal applies to both full time Florida residents as well as part time homeowners whose primary residence is in another state.

The proposal is to require a study to determine the impact.... There is no plan other than to take a look at the idea. The state will study it for a year and present the results next February (2025).

Property taxes are definitely too high. Unincorporated Sumter already scams from Wildwood for their sheriff’s department. Residents pay for a local police department AND for the sheriff’s department. Fun Fact: Commissioners gave them a little over 42 million last year alone to take care of law enforcement.

No incentive for it to apply to part time homeowners; they can't vote. That's the secret to the Florida economic miracle - keep taxes low for residents by skimming money off of tourists and part timers - in other words, people who can't vote.

Here’s how taxes works. They never even go down and will always go up cause there’s always good cause to raise taxes in what ever form it rears it’s ugly head. Don’t have to budget someone’s else’s money.

Why mess with something that is very good.

So if I own a million dollar home here and a condo in Key West and several yachts and travel half of the year I would pay almost nothing in taxes to Florida. Consumption taxes hit the lower income earners and benefit the higher income earners.

It is the opposite of a progressive tax system which we have had for a hundred years where we as a society recognize that the wealthy should bear a greater burden of the operation of government. It is a very old truth, the obligation of the wealthy.

Of course rich people and their bought representatives in the legislature have little interest in how burdened the poor might be. They just need to find their bootstraps and wait for the trickle down which is coming from all those tax cuts for the rich.

If rich people have bought the representatives, they aren’t getting their money’s worth!

In 2020, the top 1 percent of income earners earned 22 percent of all income and paid 42 percent of all federal income taxes – more than the bottom 90 percent combined (37 percent).

Gee, I wonder if there was anything special about 2020 that would have you pick that year.. oh yes the pandemic and the tax credits. Now try a more honest statistic. Federal income taxes are only 25% of the total tax burden. The other 75% are state and local taxes including sales taxes, and Soc Sec and Medicare taxes.

Come back and tell me what the relative tax burden is when you look at the entire tax payment picture. And you do realize this proposal is just Florida making looking at the Federal income tax fairly meaningless. This proposal would increase the tax burden on the poor if it is revenue neutral.

One way or another you are going to pay taxes. The State does not operate on Fairy Dust (unless you live in Disney). A consumption tax is a really bad idea. It will continue to creep up and up. With property tax at least you know what you are going to pay for that year!

We would lose all our property tax exemptions and hurt the poor and disadvantaged. Keep well enough alone.

A study on this would be good. One of the reasons Florida has no income tax is because it collects enough from the tourists. A consumption tax would also collect from the tourists. Let's do the analysis and see what it shows.

For me, with a 5% consumption tax I would come close to paying the same amount as my property taxes. I certainly don't want to see sales tax increase to 12% but I don't think it would need to. If it increased by only 2% (9% total tax) I could live with that and save money too.

Snowbirds would win since they would no longer pay property tax but also would not pay the consumption tax for the six months they are gone.

Renters *might* break even. They would have to pay the increased consumption tax but the savings in property tax might result in lower rents or at least lower increases in rents.

Tourists would end up paying more.

Business property could go either way. Would a business pay as much in additional sales tax as they would save in property tax? That is something the study would show.

There is no proposal to implement anything yet, just to conduct a study to determine what the impact would be. It will be an interesting study to read.

If you have money to spend your annual taxes will be higher for sure, one new mid-range car purchase should just about cover your savings in property taxes. Add up what you spend a year and you will be surprised at what it is going to cost to do something like this.

Ultra high taxes
 

Yes, Florida is quickly becoming the unaffordable state. The “No Income Tax” facade is quickly collapsing as homeowners find themselves paying 10-12 thousand a year in taxes and bond if they buy in the Villages.

Then pile on 800-1000 every six months for auto insurance and 1500-2000 for homeowners and it can be a very pricey place to live.