Before you go electing me, you should understand that with a name like Elweedz, i am pro-reform on other topics as well.

I’m in favor of the Homestead Act. Considering all the other taxes that are continuously increasing, why not reward someone for long term home ownership. Also keep in mind, people that have been in their homes for 30+ years are most likely retired, or soon to be retired; at which point most likely their earning potential will decline. If property taxes continue to increase significantly each year, a onetime homeowner for 30 years might find themselves in a position where they can’t afford their home; because as we all know insurance will continue to increase annually.

As far as the proposal to abolish real estate loan interest as a tax write off, why? Real Estate is an investment, whether it’s a primary home or investment property. When investing or running a business, interest and fees paid due to business operating expenses are tax deductable; therefore why not interest paid on loans to buy real estate. When you sell that real estate for a profit the government wants their cut, it’s only fair you can deduct those expenses incurred that got you to the point to earn a profit. Understandably renters don’t have this advantage, but in America everyone has the opportunity to build credit, to earn income, and to save for investment purposes. If someone chooses not to own a home, and they choose to rent, they also choose not to take advantage of the tax breaks that come with homeownership.

Sarasota Mortgage has apparently never heard of the IRS disallowance of personal use of business property.

It's an interesting argument that weighs the rights of existing owners against the rights of new owners. Matt having pointed out that there's already a property tax cap related to income, it would seem the homestead exemption is not needed for the purpose of "not pricing someone out of their home" and only serves as a subsidy from one generation to another.

One important point: under a normal/non-bubble market, values and thus assessments and property taxes, will be within most caps. The caps really only kick-in during rare divergences from longterm trend-lines such as we saw from about 01-06.

I agree with elweedz that high home prices should be UNDESIRABLE. Home appreciation should keep pace with inflation and you build your equity by paying down the principal of the loan.

I would still maintain the interest tax deduction, as I think that would have little effect on home prices. I also would level the playing field on property taxes where entire sub divisions are given an assessment and your individual taxable amount is based on square footage of comparable sales within the sub division.

I think the three year cycle of tax assessments is fair and everyone is given an opportunity appeal their assessed value. In fact, all home buyers are able to appeal their assessment immediately upon purchase as long as it is done by June 1st. So if you buy a foreclosure, REO, short sale, etc. for current market value while the home is assessed at prior year market value, you can get it adjusted for the same tax year.

I know someone that does this for a living so I have some knowledge regarding the subject. The only catch is that if you do appeal your assessment, you lose your Homestead Exemption. In the end, it could still be worth it though depending on current assessed value and the old assessed value. It is fairly easy to calculate the savings. Also, the amount you save from the credit is not significant. The limit increase may be more valuable than the actual cost savings. However, given today's real estate market, I highly doubt that we will see the same type of appreciation during the boom so the assessed values should remain more stable.

Frank, I remember hearing before that you lose your Homestead credit if you appeal, but I'm pretty sure I checked with the state and was told that's untrue. I need to put in a call to the assessors this week, so I'll see if my memory is right.

Jamie you may be right. In fact, I hope you are. I think it is unfair to lose the credit just because you appeal or petition and feel the assessor did not do their job in assessing the correct value. I only found this out when I called them myself on a property for a friend in the city. I was only able to speak with a representative so maybe they do not know if it has changed. We are still in the appeal process. Unfortunately, this is a petition so it won't be heard until the following year. This could work in our favor as we will need more recent comps. for the hearing. I would think home sales in the winter will be more favorable and could bring the assessed value down even more. They have my friends home assessed for 550k when they are now going for 400k. Since the base tax rate in the city is about 2.268%, that translates into about $4,020 savings per year. That savings is much greater than what the Homestead currently gives him so it is a no brainer if in fact they do lose it (hopefully not).

I think the issue is that some people "lose" the credit because their assessment drops so sharply, not because they're temporarily ineligible. But I'll definitely check on that. Best of luck to your friend.

You do not lose your homestead tax credit if you appeal. I just appealed my assessment and it went down, but not to the point that my actual assessment was equal to my taxable assessment. The result, a smaller homestead than I would have had with a higher assessment, but I still had a homestead.

The important thing to remember with the homestead is that you will never pay more than your actual assessment. All the homestead does is limit your increase in any given year. Eventually the homestead to be diminished to the point that taxable assessment equals actual assessment, but taxable assessment will never be greater than actual assessment.