Proposed state law would give new homebuyers better idea what their property taxes will be

Brevard County Property Appraiser Dana Blickley says it's the biggest complaint she and other appraisers in Florida receive: New homeowners get sticker shock when they get their tax bills, and find out their property taxes are much higher than the tax paid by the previous owner.

That's because of "Save Our Homes," which caps how much a Florida homestead's assessed value can increase each year to the lesser of 3% or the rate of inflation.

"Tax estimator" bills under consideration in the Florida Legislature would require disclosure of estimated post-sale property tax bills.

"We'd love to get it across the goal line this year," said Pinellas County Property Appraiser Mike Twitty — who is helping spearhead the effort as legislative chair of the Property Appraisers' Association of Florida.

Here's are details about the issue and the proposed legislation:

What's the problem the Florida Legislature is trying to solve?

Property appraisers say that 11 years of positive value growth in the Florida real estate market has resulted in the largest Save Our Homes cap benefits since the start of Save Our Homes in 1995.

That's good for the longtime owners of a home, whose property taxes typically are not rising as fast as their home's value.

But this is resulting in the largest "cap resets" ever experienced by buyers of Florida residential real estate after a house is sold, especially when the prior owner received the benefit of homestead exemption and the Save Our Homes cap for many years.

After the house is sold, property appraisers are required to reset the capped assessed value to the market value of the home, which will be the basis of the new owner's property taxes.

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How big is the problem?

New buyers typically face dramatically increased property taxes, in comparison with the previous owner.

In Brevard County, for example, Blickley said there were 6,770 homestead properties that were sold in 2022. The average taxes for those properties was $2,031 for the 2022 tax roll for the previous owner, and the same properties have an average taxes of $4,652 for the 2023 tax roll for the new owner.

Who is affected the most?

Blickley said the increase has the biggest impact on homebuyers moving to Florida from another state, as well as first-time homebuyers. Floridians who move their primary residence from one home they own in Florida to another often are eligible for what's known as "portability," which, in effect, enables them to transfer the benefits of the Save Our Homes cap on assessed value increases from their old home to their new home.

What would the legislation do?

House Bill 295 and Senate Bill 380 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 at current rates.

It also would prohibits printed listing materials and social media posts produced by real estate sales agents from including the current owner's property taxes.

How would the legislation help homebuyers?

Blickley says the bills would increase transparency and consumer protection.

Property appraisers believe this legislation would go a long way to better informing new buyers of their future property tax obligations, allowing them time to prepare, rather than blindsiding them.

What is the status of the bills?

The Senate and House bills have been making their way through the legislative committee process.

However, Twitty says he believes the measure has only a 50-50 chance of becoming law this year. And that's only if the proposal becomes part of a larger tax package the Florida Legislature will be considering. He believes it's too late in the two-month session scheduled to end on March 8 for the proposal to move forward as a stand-alone bill.

Has there been much organized opposition to the bill?

Florida Rep. Tyler Sirois, R-Merritt Island, who chairs the House Regulatory Reform and Economic Development Subcommittee, said he has heard no such organized opposition from the real estate industry.

But Twitty says, behind the scenes, the Florida Association of Realtors and Zillow have expressed concerns about technical issues of some of the bill's provisions that he is trying to work through with those entities and the bill's sponsors, potentially through amendments to the measure.

Dave Berman is business editor at FLORIDA TODAY. Contact Berman at dberman@floridatoday.com, on X at @bydaveberman and on Facebook at www.facebook.com/dave.berman.54

This article originally appeared on Florida Today: Bill in Tallahassee would give homebuyers better idea property taxes