On January 29, voters spoke loud and clear. Amendment 1 passed with nearly 65% of the vote - an marvelous percentage. With the passage of Amendment 1, many people will be seeing some major changes in their tax bills. Are you one of them? Here's quick rundown on the four sections of Amendment 1, what each section is, and how it might apply to you.
Part 1: Portability
Loudoun County Personal Property Tax
The first part of Amendment 1 allows those who received a homestead exemption to exchange their Save Our Homes benefit to a new home under definite conditions. Under the old system, many people were "trapped" in their homes - unable to move because a move would mean a drastic increase in their taxes. The large increase in tax was due to the every year 3% cap that a homesteaded asset is privy to. So if asset values increased more than 3% every year, a homesteaded property's assessed value capped out at 3%. You can see that a homeowner that has resided in a home for a amount of years would see a gigantic tax benefit by means of a lower assessed value. Under the old plan, each time you purchased a new home, you lost any accumulated tax benefit from your old home and the assessed value reset to the store value of your new home.
Under the new amendment, you get to take your accumulated tax benefit with you as long as you apply it to someone else homestead within two years. A jobber that had homestead exemption in 2007, and who either sold or abandoned their homestead in 2007 will be eligible to take their Save Our Homes benefit with them if they move to a new home in 2008 and apply for homestead portability. From 2008 onward, you can take your Save Our Homes benefit with you as long as you exchange it within the same year or the following year.
In order to receive this benefit, you must apply by March 1, 2008 to your asset appraiser for your new homestead exemption and for the exchange of the "Save Our Homes" benefit to your new homestead for 2008.
In order to take benefit of portability, you have to make two cut off applications - one for your new homestead exemption, and one to exchange the Save Our Homes benefit for 2008. You'll find the application forms Dr-501T and Dr-501R on the Florida group of revenue website.
Here's a quick Faq regarding portability:
1. How much is the portability benefit worth?
You can exchange up to 0,000 of portability benefit to a new homestead. If your new homestead is worth more than your old one, you exchange the dollar amount. If your new homestead is worth less than your hold one, you exchange the percentage. For instance: your current homestead is assessed at 0,000, but under Save Our Homes, 0,000 of that is exempt. If you move to a new home that is assessed at 0,000, your portability benefit will be 0,000. If you move to a new homestead that is assessed at 0,000, your portability benefit will be 50%, or 0,000.
2. Is the turn of homestead and exchange of Save Our Homes automatic?
No. You need to apply for each benefit separately.
3. How do I apply for portability?
You plainly turn in a completed application form to the office of the county appraiser in the county in which your new homestead is located.
4. Does portability only apply if I buy a new home?
No. If you already own a second property, you can exchange your homestead exemption to one asset to the other and exchange the Save Our Homes benefit as well. Make note that your Homesteaded asset must be your traditional residence.
5.Am I eligible for portability this year?
If you filed to give up your old homestead after January 1, 2007 and are claiming a new homestead for 2008, you're eligible, but you have to file your application for portability by March 3, 2008.
Part 2: added ,000 Homestead Exemption
The second part of Amendment 1 is an added ,000 homestead exemption. The exemption is ready to whatever who is already claiming the traditional ,000 exemption. In order to claim it, you don't have to do anything. It will automatically be applied to your 2008 tax assessment. In Hillsborough County, the median savings will be 0-300 per household. This is how it will be calculated:
First 25,000 of value - exempted from taxes
Second 25,000 of value - fully taxable
Third 25,000 of value - exempted from all taxes except the school taxes
Why isn't the second 25,000 of value exempt? It is designed to protect cities and towns within Florida that may have many lower assessed asset values, particularly in more rural areas. If the irregularity applied to the second 25,000 of value, many of these cities and towns would not derive sufficient revenue to run their local governments.
Why does the second 25,000 exemption still allow for the schools taxes to be collected? simple acknowledge is that the revenue is needed to fund our schools.
Part 3: Tangible Personal asset Exemption
According to the Dor:
Tangible personal asset is all goods, chattels, and other articles of value. It includes: machinery, equipment, furniture, fixtures, signs, window air conditioners, supplies, leased, loaned, borrowed, or rented equipment used in a business, movable home attachments on rented land (carport, screened porch, Florida room, etc.) furniture and appliances in rental properties.
The third part of Amendment 1 is a ,000 exemption on all tangible personal property. Enterprise owners must perfect the Tpp return and file it by April 1 each year. If it's thought about that your total tangible personal asset is less than ,000, you won't have to file again. The first ,000 of tangible personal asset is exempt from taxation under Amendment 1.
Part 4: 10% Non-Homestead evaluation Cap
The final part of the amendment is a 10% limitation on evaluation of non-Homestead property, both residential and non-residential. As of January 1, 2008, state law requires that all non-homestead asset be assessed at just store value, and be reassessed annually, but the turn resulting from the reassessment can not exceed 10% of the current assessed value, and the assessed value can not exceed the store value. In 2009, owners of non-homestead asset will be able to apply for the 10% non-homestead evaluation Cap.
In practical terms, that means that as of January 1, 2008, the assessed value of your non-homestead asset will be equal to its store value. If your asset is appraised at 0,000, it will be assessed at 0,000 for tax purposes. In 2009, if you apply for the 10% Cap, the asset evaluation can not be any higher than 5,000 - 10% above this year's assessed value - no matter how much the store value increases. If the store value of the asset is less than that, then the assessed value can be no higher than the store value.
You'll find any forms needed to apply for the varied exemptions at the Dor web site or at your county appraiser's web site.
Florida's Amendment 1 - What It Means to You
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