Surprise Property Taxes Would Be Stopped Under New Florida Bill

A proposed state law could stop Florida homebuyers from receiving unwelcome surprises after purchasing a property from a previous owner, a move that's normally followed by a sudden rise in property tax bills.

According to Florida law, a property appraiser cannot increase the value of a home by more than 3 percent or the percent change in the Consumer Price Index (CPI)—whichever is less—after the first year the property receives a homestead exemption. This 1994 measure, called the "Save Our Homes" assessment limitation, is aimed at making sure that the assessed value of a home is never more than the just value of the property.

While SOH protects homeowners from sudden tax hikes, this cap is removed when ownership of the property changes. What is happening now in the state, as home values have grown in recent years, is that new homeowners end up paying much higher taxes than the previous property owners.

After the sale, property appraisers reset the capped assessed value to the current market value of the home, which naturally brings up property taxes for new owners.

A couple of new bills, HB 295 and SB 380, are trying to change that by requesting that new homeowners are given an estimate of post-sale property tax bills. This information would appear in listings of residential property in the form of a tax estimator tool.

Brevard County Property Appraiser Dana Blickley told Newsweek that the regulation is necessary "to promote transparency in Florida property tax system and for consumer protection."

According to Blickley, the current system particularly hurts "homebuyers moving to Florida and first-time home buyers." She mentioned that Floridians moving from one primary residence to another within the state are often eligible for "portability," which enables them to transfer benefits of an assessment cap on assessed value increases from their previous home to their new home—shielding them from the surprise hike in property taxes.

If approved, "the new law would require online listings of residential property to include a property tax estimator tool, which calculates the property tax that would be due on the property using current tax rates," Blickley said. "Just as important, it would prohibit printed listing materials and social media platforms and posts produced by real estate sales agents and agencies from including the current owner's property taxes."

The House and Senate bills have been moving through the legislative committee process, writes Florida Today, but is unlikely to pass as a stand-alone bill, Pinellas County Property Appraiser Mike Twitty told the news outlet.

According to Twitty, the proposed legislation has a 50-50 chance of becoming law this year, depending on whether it's included in a larger tax package which will be considered by the Florida legislature.

In an op-ed published on the Tampa Bay Times last week, Twitty wrote that "the Property Appraisers' Association of Florida, Florida Association of Property Appraisers and the Property Tax Oversight division of the Department of Revenue are supportive partners of this legislation to better protect homeowners in the state of Florida."