Soon after Florida geared up to face the Super Exemption on the Jan. 29th ballot, Leon Chief Circuit Judge Charles A. Francis ruled the ballot language unclear and therefore unconstitutional. Congress went back to the drawing board and came up with an amendment that not only allows current homeowners to move freely without fear of losing their Save Our Homes (SOH) assistance, but offers benefits for non-homesteaded property as well. Opposition to the amendment states that the provisions for the non-homesteaded property don’t go far enough. While the author agrees whole-heartedly, there is also no reason to throw the baby out with the bath water. This is definitely a step in the right direction.

Under the proposed amendment, owners of homesteaded property could take up to $500,000 of Save Our Homes savings to a new home purchase. This creates two scenarios. The first involves a homeowner moving up to a more expensive home. For example, if their previous home value were $400,000 and, through SOH was assessed at $200,000, they would have $200,000 to port. If they were to buy a home valued at $500,000, they would transport the full $200,000 to create a new assessed value of only $300,000.

The second scenario relates to a homeowner that is downsizing. When buying a home with a lower just market value than the previous home, the homeowner may transfer a pro-rated portion of their SOH savings. For example, let’s use the same home sale as above of $400,000 with an assessed value of $200,000. What would happen if they were to purchase a home valued at only $300,000? Looking back at the home they just sold, the SOH savings of $200,000 is 50% of the property value of $400,000. This is the ratio that the homeowner will continue to enjoy with the new purchase therefore creating a new assessed value on the new property of $150,000. ($300,000 x 50% [$200k is 50% of $400k] = $150,000). In the author’s 90 minute closed door session with David Johnson, the Seminole County Property Appraiser, David revealed that the average Save Our Homes savings in our area would be around = $1,670. It is also important to note that this would apply to all property tax levies... including schools.

While the SOH provision will benefit those currently homesteaded in Florida, there are valid concerns regarding the SOH Act violating the U.S. Constitution’s “equal protection” and “interstate commerce” clauses. The bolstering of the SOH will elevate its stature and likely make it more susceptible to lawsuit. Only time will tell.

Another measure in the proposed amendment relates to doubling the current homestead exemption to $50,000. In order not to remove some homes in rural Florida counties completely from the tax roles, Congress chose to keep the 2nd $25,000 of a properties value taxable and make the 3rd $25,000 exempt. (If a property’s assessed value is over $75,000 the nuance in the proposition is immaterial.) This measure does not apply to school property tax levies.

The amendment also allows for a 10% cap on non-homesteaded property and an exemption on tangible personal property of $25,000 for small businesses. Additional explanation can be found at OrlandoMortgagePro.com. To see the exact ballot language please send an email with that request to TAX@OrlandoMortgagePro.com and it would be gladly forwarded to you directly.

Chris Brown is a Certified Mortgage Planning Specialist with Trinity Mortgage in Lake Mary and can be reached directly at 407-377-0500 x 210 or PHG@OrlandoMortgagePro.com.