Latest / Florida Homebuyer Weekly / Florida Property Taxes: BIG Changes Ahead? | Joseph Hoolihan

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Florida Property Taxes: BIG Changes Ahead? | Joseph Hoolihan · Florida Homebuyer Weekly

• 0:07
  SPEAKER_00: Welcome to Florida Home Buyer Weekly.
• 0:09
  SPEAKER_00: I'm your host, Joel Benson.
• 0:10
  SPEAKER_00: Each week I'm joined by local realtors and other professionals to talk about what you really need to know when buying a home or making a move to Florida.
• 0:19
  SPEAKER_00: Today I'm joined by Joseph Hoolihan with the Holland Hoolihan Group.
• 0:23
  SPEAKER_00: We're talking about Florida property taxes and what proposed changes could mean to homeowners.
• 0:28
  SPEAKER_00: And Joseph is also currently running for a Florida house seat, so he brings a unique perspective to the uh the tax subject.
• 0:36
  SPEAKER_00: So, Joseph, thanks for joining us today.
• 0:38
  SPEAKER_01: Yeah, absolutely.
• 0:39
  SPEAKER_01: Good morning.
• 0:39
  SPEAKER_01: I know.
• 0:41
  SPEAKER_00: What uh if you could just give me just a brief background, you know, how long have you are you from Florida?
• 0:46
  SPEAKER_00: Where are you from?
• 0:47
  SPEAKER_00: How long have you been in real estate?
• 0:49
  SPEAKER_01: Yeah, so I was actually born in Buffalo, uh, New York.
• 0:53
  SPEAKER_01: Uh family moved down in 1988, 89, I think.
• 0:57
  SPEAKER_01: And so I've been down here going on 40 years.
• 1:00
  SPEAKER_01: Uh grew up uh kind of in the Tampa area, um, but uh lived and worked between Tampa, St.
• 1:07
  SPEAKER_01: Pete's, uh, Orlando, and then down here in the uh Lakewood Ranch in Bradenton, Sarasota area.
• 1:13
  SPEAKER_01: Uh, but been uh licensed real estate agent since 2015.
• 1:18
  SPEAKER_01: Um kind of started off doing timeshares and stuff and the developer world, and then got into new construction stuff um years ago and kind of now focus on uh new construction stuff as an uh independent team or a small team of uh just two of us and selling um mostly new construction homes and new construction communities here in the Manatee and Sarasota area.
• 1:42
  SPEAKER_01: Yeah.
• 1:42
  SPEAKER_00: Perfect.
• 1:43
  SPEAKER_00: Well, great.
• 1:43
  SPEAKER_00: Well, I'm glad to have you today.
• 1:45
  SPEAKER_00: So there's a lot of talk right now about proposed changes coming, right?
• 1:50
  SPEAKER_00: And obviously you being in the market and me, you know, moving to the market, it's something that's that's a huge topic.
• 1:57
  SPEAKER_00: Tell us just briefly what you know, everyone I hear all the you know, taxes, property taxes are going away, and you know, a lot of misinformation out there.
• 2:05
  SPEAKER_00: Why don't you tell us what's actually on that ballot that's that's coming up?
• 2:08
  SPEAKER_00: Is it November 3rd?
• 2:10
  SPEAKER_01: November 3rd, yeah.
• 2:11
  SPEAKER_01: Um, so we're supposed to start voting on that.
• 2:14
  SPEAKER_01: Um the I guess the deadline, the last day to vote would be November 3rd.
• 2:18
  SPEAKER_01: And it's essentially a bill that's in theory going to eliminate uh the majority, if not all, of property taxes for somebody that has their home in the homestead status or the um primary residence status.
• 2:35
  SPEAKER_01: And so the idea, yeah, the idea is just that they're uh the state wants to give homeowners the opportunity to actually own the home.
• 2:44
  SPEAKER_01: And uh you can't really do that if you're paying fees and taxes to to the state or or to you know whoever else.
• 2:50
  SPEAKER_01: And so the idea is that they're gonna uh uh increase the homestead exemption uh and hopefully eventually remove the property tax that's charged by the state uh completely, eventually, is is the idea.
• 3:04
  SPEAKER_00: So okay, so one of the distinctions there is that the the is it the school taxes that just there's gonna be no change to those, right?
• 3:16
  SPEAKER_01: Correct, yeah.
• 3:17
  SPEAKER_01: So and that's one thing.
• 3:19
  SPEAKER_01: I think that like you said, there's a lot of misinformation.
• 3:21
  SPEAKER_01: A lot of people are scared about different things getting not funded, but the school tax will remain.
• 3:26
  SPEAKER_01: And then any assessments that are on there, like we have C D fees and stuff like that, that shows up on the tax bill, that will stay on there.
• 3:33
  SPEAKER_01: Um, but the the property tax, I guess in general, uh is is gonna be reduced or removed.
• 3:40
  SPEAKER_00: Right.
• 3:40
  SPEAKER_00: Yeah, and that's a good point because the the most common piece of misinformation I hear is is people talking about if they're if they're you know sort of not in favor of lower taxes, they'll say something like, you know, where's that money gonna come from?
• 3:53
  SPEAKER_00: Who's gonna fund it?
• 3:53
  SPEAKER_00: What about the schools?
• 3:55
  SPEAKER_00: That's a really important piece I think there is to is that the the school taxes will remain unchanged.
• 4:00
  SPEAKER_00: That's not even part of the discussion.
• 4:02
  SPEAKER_00: Correct, exactly.
• 4:03
  SPEAKER_00: Yeah.
• 4:04
  SPEAKER_00: So so let's talk about who benefits.
• 4:06
  SPEAKER_00: So if the bill passes, and of course, we don't know if it's going to pass.
• 4:09
  SPEAKER_00: Um I'll ask you your opinion on that at some point here.
• 4:12
  SPEAKER_00: But um, if it does pass, who who do we see being the greatest, you know, who benefits from it the most, I guess?
• 4:19
  SPEAKER_01: Yeah, I think there's there's a few parties or or groups of people that that you could look at.
• 4:24
  SPEAKER_01: Um, two stick out in particular to me.
• 4:28
  SPEAKER_01: And one would be um someone like like my parents.
• 4:32
  SPEAKER_01: Uh my parents bought their house uh and built that house back in 1988 or 89 when we moved here.
• 4:38
  SPEAKER_01: And that home is now paid for, uh, but they're still paying you know uh property tax on it.
• 4:43
  SPEAKER_01: And so that home I think they purchased for around$80,000 back back then.
• 4:49
  SPEAKER_01: And obviously assessments have gone up, or um, I should say uh values and uh have gone up.
• 4:56
  SPEAKER_01: And so they've gradually paid more and more property tax, but this would essentially eliminate that for them in in conjunction with the uh Save Our Homes Act that was put into place years ago.
• 5:06
  SPEAKER_01: But um so somebody that's in their home, the home is paid for, they're they might be elderly, retired, whatever the case might be on a fixed income, uh, this would be a huge benefit for them because it's in in theory going to eliminate that that payment for them and free up some money elsewhere.
• 5:23
  SPEAKER_01: Uh, and then also uh from an affordability standpoint for maybe someone like a first-time home buyer that's buying their first home uh and is limited on the on their income.
• 5:33
  SPEAKER_01: Uh there they're just buying maybe a town home or a simple single family home that's not getting too expensive, you know, maybe under three, four, five hundred thousand dollars.
• 5:43
  SPEAKER_01: This will uh dramatically help out with with that payment that they're gonna have uh as as well.
• 5:49
  SPEAKER_01: So um those two groups I think are probably gonna be the the most impacted, um, right out the gate, at least.
• 5:55
  SPEAKER_00: I want to just point out the the Save Our Homes Act, uh, and tell me if I'm explaining this wrong, because it's not it's unique to Florida.
• 6:01
  SPEAKER_00: Um you because property taxes are based on you know a valuation of your property, regardless of what the market does, the Save Our Homes Act only allows taxes once you've established homestead to increase by a certain percentage each year, correct?
• 6:17
  SPEAKER_01: Yeah, exactly.
• 6:19
  SPEAKER_01: Um and there's there's rules if you move uh from out of state or even within state, um, there's uh a process called portability.
• 6:29
  SPEAKER_01: So if you do have a home and you move, have a home in Florida and move to another Florida home and still make it your primary residence, you can in many cases carry over that benefit that that you have on that original home.
• 6:42
  SPEAKER_01: Um, you just have to, you know, uh contact the county and fill out the proper paperwork and all that.
• 6:46
  SPEAKER_01: So I think there's a lot of people that aren't aware of that and they miss out on that.
• 6:50
  SPEAKER_01: So uh, but yeah, you're you're capped at how much the um the taxes can increase every year, essentially.
• 6:57
  SPEAKER_01: Yeah.
• 6:57
  SPEAKER_00: Gotcha.
• 6:58
  SPEAKER_00: Okay.
• 6:59
  SPEAKER_00: And then also you kind of talked about homestead versus, or I guess if we're looking at somebody who homesteads their property, they've they've got obviously some benefit if this if this bill passes.
• 7:10
  SPEAKER_00: Now, what about second homeowners or people who aren't currently homestead?
• 7:14
  SPEAKER_00: Is there going to be any change?
• 7:16
  SPEAKER_00: Does this bill have any impact on their taxes?
• 7:19
  SPEAKER_01: Uh, yes and no, not nearly as dramatic as a primary residence or a full homestead exemption would be.
• 7:26
  SPEAKER_01: Um, and and and I think that's where there's some um miscommunication or misinformation.
• 7:33
  SPEAKER_01: I think uh a lot of folks are thinking that all the money's gonna go away that's being funded to the counties and to the state, right?
• 7:40
  SPEAKER_01: And so there's still the majority of homes in Florida are secondary properties or vacation homes, something like that.
• 7:47
  SPEAKER_01: So they'll uh from what I understand, they'll get a little tax relief, um, uh uh, you know, a single digit percentage, if if you will.
• 7:55
  SPEAKER_01: Uh but it won't be um won't be nearly like what the uh proper homestead exemption will be.
• 8:01
  SPEAKER_01: But yeah.
• 8:01
  SPEAKER_00: Okay.
• 8:02
  SPEAKER_00: And I also know I hear a lot about about this.
• 8:05
  SPEAKER_00: Is it a is it a December 31st deadline for homestead on this?
• 8:08
  SPEAKER_00: If it does pass.
• 8:10
  SPEAKER_01: Yeah, as far as I know, um, as far as I've researched, you have to be uh in the home or closed on the home uh by December 31st.
• 8:20
  SPEAKER_01: And I'm I'm I'm glad you said that because I literally just had a conversation with somebody yesterday that was under the impression that they could purchase the home, have it under contract, and it could be built and they just don't have to close until sometime next year.
• 8:32
  SPEAKER_01: Sure.
• 8:33
  SPEAKER_01: Yeah.
• 8:33
  SPEAKER_01: Um, and that's not from what I understand, that's not so much the case.
• 8:36
  SPEAKER_01: They have to actually be in the home, have paperwork that says they have closed on the home by December 31st, and then file for that homestead exemption by I think it's March 1st or March 15th, something like that.
• 8:47
  SPEAKER_00: Okay, so they they they would need to close.
• 8:50
  SPEAKER_00: They wouldn't uh they've got a little bit of a grace period for the actual filing of homestead.
• 8:54
  SPEAKER_00: But and the yeah, and the reason that's important is because if you if you aren't homesteaded by the end of the or at that deadline, you you and if if the law passes, right?
• 9:06
  SPEAKER_00: There's gonna be and you're not homesteaded, you're still gonna be taking take advantage of these benefits, but it's gonna be sort of a graduated benefit.
• 9:15
  SPEAKER_00: So it's gonna take, I think it's up to five years or it's prorated over five years for that full homestead benefit to be in effect for somebody who hasn't homesteaded at the end of this year.
• 9:25
  SPEAKER_01: Yeah, so what I just read was um even even the folks that have their home homesteaded by the end of the year, uh they're only gonna get up to well, right now it's about a$50,000 exemption.
• 9:40
  SPEAKER_01: Um 2027 will be up to$150,000.
• 9:45
  SPEAKER_01: And then in 2028, it'll be up to$250,000.
• 9:49
  SPEAKER_01: And from what it sounds like, it'll probably stay around there, but slowly increase with inflation.
• 9:54
  SPEAKER_01: So, you know, if somebody's got a million-dollar house, it's it's not gonna wipe out all the property tax for them.
• 9:59
  SPEAKER_01: And so there's still gonna be money coming in from that difference.
• 10:04
  SPEAKER_01: Uh, however, yeah, if somebody doesn't make their home their primary residence until say 2027, they'll still get the$50,000 exemption, but it's going to be for roughly four to five years.
• 10:16
  SPEAKER_01: They don't get that ramp up right away.
• 10:18
  SPEAKER_01: They've got to wait that period.
• 10:20
  SPEAKER_01: And then I think on the fifth or sixth year, then they'll qualify to jump to that whatever it is at that point, 150 or 250 at that point.
• 10:28
  SPEAKER_01: Yeah, but there is gonna be a waiting period if you're not in by December 31st, yeah.
• 10:33
  SPEAKER_00: Gotcha, gotcha.
• 10:34
  SPEAKER_00: Yeah, it's interesting because you know, all online I'm in all these groups and everybody's trying to sound the alarms, you know.
• 10:39
  SPEAKER_00: You got I mean, of course, if if you're if you're sort of at the stage of the process where, you know, you're yeah, maybe you want to, you know, kick it in gear and and close on your contract, but uh do you do you imagine or do you foresee just like an influx of people just closing on transactions before the end of the year?
• 10:57
  SPEAKER_00: Let's say it passes, right?
• 10:58
  SPEAKER_00: So that there's an actual benefit of doing so, I guess.
• 11:02
  SPEAKER_01: Uh yes and no.
• 11:03
  SPEAKER_01: I I've got mixed feelings on that too.
• 11:05
  SPEAKER_01: Um, we we do talk to people just about every day that it come the conversation comes up in some form or fashion.
• 11:12
  SPEAKER_01: Um, but again, that misinformation comes into play because we also talk to a lot of investors that are trying to grab a home and then think that that will automatically apply to them and it it doesn't, right?
• 11:22
  SPEAKER_01: So it's uh I think inevitably there will be an influx, uh, but I think a lot of that could be misinformed people trying to take advantage of of the uh exemption.
• 11:35
  SPEAKER_01: Um but I I I do think that there's gonna be a handful of of um people that are on the fence, maybe, and then that will kind of push them, push them to one side or the other, uh, and then yeah, have some extra sales uh by the end of the year and extra closings by the end of the year for sure.
• 11:53
  SPEAKER_01: Yeah.
• 11:54
  SPEAKER_00: Maybe it'll uh December, maybe it'll be a busy month then for a change, right?
• 11:58
  SPEAKER_00: Although I guess December, so up here where it's cold in December, things just stop, right?
• 12:04
  SPEAKER_00: So I imagine that's a good time of year for you guys still.
• 12:06
  SPEAKER_00: So when I make that reference, December being slow, it probably isn't the case in your market.
• 12:13
  SPEAKER_01: It's funny because I've talked to a few people about busy seasons and uh this and that, and you know, I've I've been in uh doing this now for uh you know roughly 10 years, and um I can never seem to pick out a proper season of when it gets busier and when it's not.
• 12:29
  SPEAKER_01: It's you just kind of roll with the punches.
• 12:31
  SPEAKER_01: You know, we went through COVID and then it was uh that whole time frame was busy.
• 12:35
  SPEAKER_01: Um now it's just kind of slower in general, but uh who knows?
• 12:39
  SPEAKER_01: I I do think um come after November 3rd if that does pass, it'll pick up a little bit.
• 12:44
  SPEAKER_01: Uh I don't think it'll be too crazy, but everyone that I've talked to is kind of trying to prepare for it, at least get things in place to get ready for some extra sales, you know.
• 12:55
  SPEAKER_00: So, okay, then let's talk about trade-offs.
• 12:57
  SPEAKER_00: So, like, you know, the of course you've got all this misinformation out there that we talked about, but and there's you know, there's the doomsayers, people that just think, you know, money's just gonna evaporate.
• 13:07
  SPEAKER_00: But but what are the trade-offs?
• 13:08
  SPEAKER_00: Like how, you know, that that is a legitimate question, right?
• 13:11
  SPEAKER_00: Like, how where is where's the money that the government was collecting?
• 13:15
  SPEAKER_00: How is that going to be sort of replaced, I guess?
• 13:18
  SPEAKER_00: Or what how what impact financially do you think it's gonna have?
• 13:23
  SPEAKER_01: Yeah, that's a tough one because um lately, you know, we've been seeing or I've been seeing a lot of commercials uh from different political parties or different uh government groups, uh including like the um law enforcement, especially a lot of the sheriffs have been speaking up about um how this is going to affect them.
• 13:43
  SPEAKER_01: And I think it comes down from uh essentially DeSantis um, you know, kind of getting into the financing of the state and noticing that um some of these agencies or some of these programs were getting or using money in ways that they didn't necessarily need to.
• 14:05
  SPEAKER_01: Um and you know, we Florida for the most part runs at a surplus.
• 14:09
  SPEAKER_01: We we don't really have any debt.
• 14:10
  SPEAKER_01: Uh, I believe Manatee County is very, very well off as well.
• 14:14
  SPEAKER_01: And so we're sitting on a lot of extra money and then uh using some of that money to pay exuberant uh you know uh salaries or payrolls that may or may not need to be paid.
• 14:26
  SPEAKER_01: And so I think the idea is that this will cut down on some of that um unnecessary spending, if you will, and uh pass that savings on to homeowners, hopefully.
• 14:39
  SPEAKER_01: And so I think some programs will be cut, um, but I I think the idea is that those programs may or may not have been needed to begin with, uh, you know, if if that makes sense.
• 14:51
  SPEAKER_01: And so I think inevitably some people are scared, some government positions are scared that they're going to lose some resources or money for programs or whatever.
• 15:00
  SPEAKER_01: But um I think those will probably end up being the first to be dismissed or go or get cut are the programs that probably aren't really that necessary to begin with.
• 15:11
  SPEAKER_01: Um if they need to start cutting into maybe salaries or positions that uh are hanging on a little bit.
• 15:21
  SPEAKER_01: But it I also think with things like AI coming along that it's getting a lot better, some of these things can be more efficient.
• 15:29
  SPEAKER_01: Um, you know, earlier I was just thinking of you know, some of these 911 calls that that come in that are accidental dials, you know, and we have to pay somebody to sit there and take that call and listen to it and make sure it's not an accidental dial or whatever it might be.
• 15:43
  SPEAKER_01: And if there's a way to kind of maybe reduce that or have AI take over at a fraction of the cost, you know, that might not be a bad, bad thing.
• 15:53
  SPEAKER_01: So um I I think it'll be uh somewhat tough to figure out what to cut and what not to cut.
• 16:01
  SPEAKER_01: Um, if if anything does need to be cut, but I I I think we'll figure it out relatively quickly.
• 16:07
  SPEAKER_01: And I think in the long term everything will be fine and everything will operate the way it's it's supposed to and the way it needs to.
• 16:13
  SPEAKER_01: So um hopefully I'm not I'm not too worried about it, but we'll see.
• 16:18
  SPEAKER_00: Well, it's funny because it's the the the phrase I kept going through my mind as you were talking about there was just sort of like trim the fat, you know what I mean?
• 16:26
  SPEAKER_00: Just like get rid of all the unnecessary spending.
• 16:28
  SPEAKER_00: And and that's that's kind of you know, maybe part of the problem there is that the people voting on this are concerned about you know them being part of the the cuts, right?
• 16:37
  SPEAKER_00: Right.
• 16:38
  SPEAKER_00: So what what are you hearing like so you know you're out on the campaign trail, right?
• 16:45
  SPEAKER_00: So you're talking to people all the time.
• 16:47
  SPEAKER_00: What what are you hearing both from sort of the communities and and even maybe from some of the leaders?
• 16:53
  SPEAKER_00: And is your sense that this is something that that will pass in some form?
• 16:59
  SPEAKER_01: Uh I I do.
• 17:01
  SPEAKER_01: I mean, it needs 60%, which is a a good amount.
• 17:05
  SPEAKER_01: Uh and it almost seems like there's a lot.
• 17:07
  SPEAKER_01: It's it's from what I've read and who I've talked to, it's it's split down the middle.
• 17:12
  SPEAKER_01: Um, but I think it's it's gonna come down to um those two groups that I mentioned earlier, you know, the ones that are on that fixed income, that uh their homes are paid off, I I think this really could help help those folks out.
• 17:27
  SPEAKER_01: Um and then also the uh first-time home buyers.
• 17:30
  SPEAKER_01: And so if they get out and vote, I I think they would vote for for this to pass, and and um then there's a a good chance that that it will.
• 17:39
  SPEAKER_01: Uh, but if you know though those folks don't have the resources to get out to vote, and the only people that are voting are the ones that you know this would negatively affect potentially, um, then there's there's it might not be much of a chance to to for it to pass.
• 17:53
  SPEAKER_01: But you know, every day I see posts on this way or that way and trying to convince people one way or the other, and it's um you know, a lot of it's accurate, some of it's inaccurate, but uh right now I I think it's probably evenly divided, and so that 60% could be could be tight.
• 18:10
  SPEAKER_01: I I I think it'll be uh I'm curious to see what the numbers are uh for sure.
• 18:16
  SPEAKER_00: Yeah, for sure, me too.
• 18:17
  SPEAKER_00: Well, listen, Joseph, this has really been a lot of great information.
• 18:20
  SPEAKER_00: Uh before I let you go, where's the best place for people to find you or get in touch?
• 18:26
  SPEAKER_01: Yeah, um the easiest and best place to start is usually just our website, uhlandhulahan.com.
• 18:34
  SPEAKER_01: Uh that's for uh our real estate team, Hall and Hoolahan Group.
• 18:38
  SPEAKER_01: And then um if you want to check out the uh political side of things uh through November 3rd, hopefully pass that uh hulahan for Florida, uh hulahan uh for florida.com.
• 18:51
  SPEAKER_01: Uh you can get some information on what I'm trying to do there too.
• 18:54
  SPEAKER_00: Well, good.
• 18:55
  SPEAKER_00: All right.
• 18:56
  SPEAKER_00: Well, good luck there.
• 18:57
  SPEAKER_00: And uh to everyone watching today, if you found this conversation useful, please like this video, subscribe to Florida Home Buyer Weekly.
• 19:04
  SPEAKER_00: Obviously, check out Joseph's uh websites as well.
• 19:07
  SPEAKER_00: If you're thinking about buying a home or move making a move to Florida, or you have any questions.
• 19:12
  SPEAKER_00: Thanks for watching, and we'll see you next week.