Q&A of the Day – Should Florida’s Homestead Exemption Apply to School District Taxes?
Each day I feature a listener question sent by one of these methods.
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Today’s Entry: @brianmuddradio Please explain this.
Bottom Line: The “this” that’s referred to in today’s note was a link to a just proposed bill authored by South Florida state Rep. Alina Garcia which addresses a topic I recently touched on when discussing the Palm Beach County School Board’s decision to significantly raise compensation for the District’s teachers. As mentioned in my recent analysis: The single biggest expense on our record property tax bills in Palm Beach County is education expense. The Palm Beach County School District also happens to be exempt from the 3% homestead exemption cap on annual increases as well. Right on cue we now have two different proposals for consideration in next year’s state legislative session, which gets underway in January, that are aimed at reforming homestead exemptions to also include the limiting of what can be assessed by school districts across the state. The two proposals are necessary because prior to expanding Florida’s homestead exemption to include school district taxes, Florida’s constitution needs to be amended.
Florida’s homestead exception, which is codified in Florida’s Constitution, currently reads like this:
- Every person who has the legal or equitable title to real estate and maintains thereon the permanent residence of the owner, or another legally or naturally dependent upon the owner, shall be exempt from taxation thereon, except assessments for special benefits, up to the assessed valuation of twenty-five thousand dollars and, for all levies other than school district levies, on the assessed valuation greater than fifty thousand dollars and up to seventy-five thousand dollars...
It’s just one line which the straightforward and simple House Bill 69 seeks to strike from Florida’s constitution.
The bill’s title is: Homestead Tax Exemptions for School District Levies and its summary reads like this: Proposes amendment to State Constitution to allow current homestead exemption to also apply to school district levies. And all the seven-page bill proposes to do is to strike the words: other than school district levies from the text. If approved in the session and enacted by the voters the bill states: —This section and the amendment to Section 6 of Article VII to allow the current homestead exemption on real estate with an assessed valuation greater than $50,000 to also apply to school district levies shall take effect January 1, 2025.
It’s three-page companion bill, which is House Bill 71, would then be able to take effect as well which completes the process of ensuring all existing homestead exemptions apply to school district taxes. In terms of what this potentially means to you... Property taxes, even within a county, can vary considerably, based on where one lives. However broadly speaking, for someone who lives in an incorporated community in Palm Beach County, the school district’s taxes are likely to comprise 40-45% of your total property tax bill. Having that high of a percentage of what you pay for property taxes excluded from homestead exemptions is meaningful and would no doubt lead to considerable property tax savings for Floridians over time. Given that this would limit revenue increases for local school districts one might imagine there will be a concerted effort to combat these proposals by local school districts.
As stated during this year’s state legislative session, when a proposal to cap would limit the annual maximum increase in property taxes for homesteaded properties to two percent was attempted (which failed)… I’m supportive of any and all efforts to limit the burden of property taxes. While Florida ranks 25th nationally in property taxes, which when factored into not having a personal income tax looks especially good, that’s not at all the case in South Florida...where for example, in the Palm Beaches our effective property tax rate is 14% higher than the state average in addition to having more expensive property values driving still higher property tax assessments. In fact, Palm Beach County has higher property taxes than 93% of the country, a number which jumps to 95% when adjusted for median incomes. Few other places are homeowners are at greater risk of being taxed out of their home than where we live.
Needless to say, that hasn’t improved since February. This is a proposal I’ll keep an eye on throughout the session.