Florida's Taxing Surprise

If you're a homeowner in Florida, you may have noticed a significant increase in your property tax bill lately. Rising property taxes have been causing a stir across the Sunshine State, especially for those who moved to Florida recently to escape high taxes in other states. Let's take a closer look at what's going on.

Florida's overall appraised home values skyrocketed by 26% between 2021 and 2022, according to state data analysis. This means that anyone who bought a Florida property in 2022 may face similar situations next year, owing thousands more in property taxes than the previous owners of their homes. And the burden of these increases often falls on first-time homebuyers or people who move from other states.

This is due to a state constitutional amendment called Save Our Homes, which was implemented in the 1990s with the goal of making living in Florida more affordable. The amendment caps local property taxes for existing homeowners at 3% per year, or the change in the consumer price index if it's less than 3%. This cap also applies to existing Florida homeowners who move to a new primary residence within the state.

However, over the past three years, the share of tax dollars that has been exempt from a non-capped increase has declined, according to data from the Florida Department of Revenue. This may be due to the influx of new residents moving to Florida from tax-heavy states like New York and California, leading to higher property tax bills for many homeowners.

The unexpected increase in property taxes has caused outrage among homeowners in Florida. Some have seen their tax bills double or even triple, leading to regrets about moving to the state in the first place. Social media platforms, like Facebook, have seen an increase in discussions about property tax bills, with some homeowners considering selling their newly acquired homes and leaving the state.

Even large-scale homebuyers, such as corporate entities that own multiple properties, have been caught off guard by the rising property taxes in Florida. For example, Invitation Homes, which owns over 80,000 single-family rentals nationwide, recently stated that its tax bills could rise by as much as 8% in 2022, about 3 percentage points more than expected. This has led to plans to appeal the assessments in Florida and Georgia, where assessments rose an average of 30%.

Similar concerns are being raised in other states as well. Texas, for example, also saw increased demand for housing during the pandemic, but property taxes are projected to rise by more than 20% for some investors, even after the state passed legislation in 2019 to cap property-tax revenue growth for certain districts.

In conclusion, rising property taxes have become a significant issue for homeowners in Florida, particularly for those who moved to the state recently. The caps on property tax increases for existing homeowners under the Save Our Homes amendment may not apply to new buyers, leading to unexpected and substantial tax bills. This has caused outrage and regrets among some homeowners, and even large-scale homebuyers are grappling with higher tax bills. If you're a homeowner in Florida or considering moving there, it's essential to understand the potential impact of rising property taxes on your budget and financial plans.