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The
Multi-Billion Dollar Question That Bothers Palm Beach County Property Appraiser
Now, don't you feel that any property appraiser
should be taxpayer friendly ? After all, it is taxpayers that keep the state
working. And a property appraiser should also treat all taxpayers equally ...
equality is one of the corner stones of a democratic society ...
But what if an issue approved by taxpayers might actually force a property
appraiser to do things that might not be considered fair by a large section of
the people ? What if something that was meant to help the poorer sections,
something approved by tax-paying voters in that spirit, now most benefits the
ultra-rich while many others have to actually shell out more money for ?
Case in point : The Save Our Homes tax break approved by Florida's voters. It
was voted into effect by Floridians with very good intentions. To benefit
tax-payers of more modest means and to protect homesteads. But now, it is the
super-rich with multi-million dollar mansions who now benefit more than any
other section of the society.
Here's how it happened. Floridians in 1992 voted for the Save Our Homes tax
break which capped the yearly increases in property assessment at 3%. This was
done mainly to protect homestead owners from having to pay huge tax bills in the
even of dramatically increasing real estate prices. People of limited means, it
seemed then, would stand to gain the most. |
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And that did seem to be the case. At least until 1999 or so. That's when a huge
boom in real estate started to drive Florida's property prices spiraling upwards.
As real estate prices skyrocketed, the prices of many of Florida's homes grew at
very high rates.Homestead owners who were protected by Save Our Homes did not have to pay much
more in taxes. But that was not so for new home builders and snow birds who were
having a second home in Florida. Their property tax bills spiraled upwards ...
The result ? A home stead owner may pay several thousands less in taxes than
his neighbor - another homestead owner - if the neighbor bought his home at a
much later time. So, based just on when a home was bought, homesteaders may be
paying a lot more in taxes than others with identical properties in the same
location.
Who stands to benefit from all this ?
The Ultra-Rich Living in Luxury Waterside Mansions !
If someone bought a multi-million dollar mansion
on the water - ultra luxury real estate - more than 14 years ago or so ago, then
his ( or her ) tax bill may be just about the same as a homesteader who lives in
a modest cookie cutter home that was built much later.
What about people of more modest means who plan to move to Florida and buy a
home there ? Well, they will have to pay a lot more in taxes than someone with
an identical property who has already been living there for several years.
But that's not all. Owners of income generating rental properties may have to be
paying a lot more in taxes too. So they just raise the rents and let the renters
pay the extra tax. So renters may have to be paying a lot more money in rents.
So who does this tax break really benefit ? It benefits mainly homestead owners
who have been living in Florida for well over a decade or so. It really doesn't
matter how wealthy they are.
It's not that wealthy people do not need tax breaks. That may not be true. Many
wealthy people got to be wealthy because they created wealth and helped a lot of
people make a living along the way. They create businesses, provide jobs, get
wealthy and buy luxury real estate. Some may opine that they may even deserve a
tax break.
The real issue may be that people with identical properties may have to pay
vastly different sums in taxes.
If new home builders are going to have to pay a lot more in taxes, then not many
may be very enthusiastic to build homes in Florida. Considering that building
new homes is one of the engines that drives a state's economy, that may not be
very good. What's more - if a county doesn't have a lot of new homes being
built, then it's tax revenues may not increase much every year.
So what do the supporters of the tax break suggest ? Some people feel that being
taxed a lot more because the home they are living in increased in value may not
be very fair either. Property prices could rise because speculators drove up the
price of the real estate in a region. Should that mean people who have been
living there for decades now have to pay more in taxes, considering that rising
property values are essentially useless to homesteaders unless they sell their
homes ?
Both sides have their views. But how can such a issue be resolved ever ?
In a recent speech, the Palm Beach County Appraiser called such discrepancies
"grossly unfair".
To read more about this, you may want to see
http://www.palmbeachpost.com/business/content/business/epaper/2006/04/09/s1a_SOH_0409.html .
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