WILL WE PAY LESS PROPERTY TAXES?
The approval or rejection of Amendment #5 in the upcoming November elections will determine whether the “Homestead Exemption” is increased in accordance with the inflation index.
By: Edda Pujadas
This November, Florida residents will have the opportunity to vote for or against Amendment #5, which could allow us to pay less in property taxes starting in 2025.
Amendment #5 would increase the value of a tax exemption known as the “Homestead Exemption,” which is a tax reduction benefit for primary residences, meaning homes that are permanently occupied by their owners.
The new fiscal proposal seeks to adjust this tax benefit to match inflation. Currently, the “Homestead Exemption” is divided into two $25,000 discounts on the taxable value of the property. If Amendment #5 is approved, residential property owners would receive an annual positive adjustment for inflation to the second of these exemptions, excluding taxes related to the school district.
Although the formulas that make up property tax assessments can be quite complex, the basic idea behind the amendment is that, as the cost of living increases, the tax exemption granted to homeowners living in their own homes would also increase. In simple terms, the additional savings on your property tax bill would be equivalent to the percentage of inflation.
In Florida, properties are taxed using a formula that considers the value of the property and the different tax rates or “millage rates” assessed by local governments, such as cities, counties, and school boards.
To understand how this would work, we can use the example of a house with a taxable price of $300,000, on which you would pay your tax bill. Now, if this is your primary residence, you currently benefit from two exemptions that reduce this value by $25,000 each, thus lowering your final tax bill.
Therefore, that same house would pay taxes on $250,000. If Amendment #5 is approved, the value of the second of the two exemptions would be adjusted annually to increase according to the inflation rate. For example, if the inflation rate is 8%, the value of the exemption would increase from $25,000 to $27,000. The adjustment would be based on the percentage change in the Consumer Price Index.
As with any proposal, there are those who support it, considering it a tax relief for Florida homeowners who, in recent years, have seen the value of their homes increase and, consequently, the amount they pay in taxes, as well as the rise in insurance policies and, in some cases, condo or homeowner association fees.
Opponents of Amendment #5, including the Florida League of Cities, argue that it would financially undermine local governments and force a greater tax burden on property owners who do not have housing exemptions. They point out that city management relies heavily on property taxes for revenue to pay for services such as police and parks.
They also indicate that the amendment will affect tenants, as people who rent out their homes or commercial properties do not benefit from this exemption and, therefore, when seeing a greater increase in their taxes, they will have to raise rents.
Let’s remember that the “Homestead Exemption” is a tax benefit available to homeowners in Florida, designed to reduce the amount of property taxes they must pay annually. This benefit is intended for the homeowner’s primary residence and offers several exemptions that can currently total up to $50,000.
Applying for this benefit is very easy. It can be done online, in person at the Miami-Dade County Property Appraiser’s Office, or by mailing the application. The most important thing is to meet the following requirements: have the legal title to your home as of January 1st of the current year, permanently reside on the property (this must be the address on your driver’s license, voter registration, and vehicle registration), and be a U.S. citizen or permanent resident of the United States and the state of Florida.
Before starting the application, each applicant will need the following: the property’s folio number, which is on the Miami-Dade County property search page (https://www.miamidade.gov/pa/property_search.asp). You will also need your Social Security number, date of birth, marital status, Florida driver’s license number, Florida vehicle registration information, Florida voter registration information (for U.S. citizens), and Permanent Resident number (for non-citizens). All these documents must reflect the address of the property for which the exemption is being requested.
If applying online, all these documents should be pre-downloaded onto the computer, as they must be attached at the end of the application. The deadline to submit property tax exemption and benefit applications is March 1st of each year.
While the primary benefit is tax reduction, as the property’s assessed value decreases, the owner pays less in taxes. It also helps to limit how much the home’s tax value can increase each year (currently capped at 3%), providing financial stability to residents.