Property-Tax Relief Plan No Cure For Home Sales

Proposed property tax relief could give a boost to South Florida’s beleaguered real estate industry, pushing skittish home buyers off the fence and easing the burden on commercial property owners, industry leaders said Tuesday.

But observers cautioned the housing market faces a multitude of challenges — the slowing economy, tight lending, skyrocketing foreclosures, too many unsold homes and high insurance rates — that must be resolved before the sector recovers.

‘The proposed tax cut would be a benefit because it would create some stabilization to property owners’ taxes,” said Michael Cannon, a real estate analyst. “But it’s no silver bullet.”

For some time, housing industry executives have cited excessive property taxes as a factor for the troubled residential market. High taxes, on top of expensive homes and burdensome insurance costs in South Florida, have priced some out of the market and stopped others from moving to the region. It’s also chilled in-state moves because buyers fear being assessed at a higher tax rate in a new home.

Ronald A. Shuffield, president of Esslinger Wooten Maxwell, a South Florida brokerage, said lower taxes might inspire some confidence in buyers. Rental activity at his firm has tripled, rising to the highest level he’s seen in three decades. He attributes it to buyers being cautious.

But that could change with the Taxation and Budget Reform Commission’s proposal to reduce tax bills by around 25 percent or more by scrapping most of the local property taxes that go to schools. The proposal, which will go to voters in November, would also cap annual property tax increases at 5 percent for investors, second home owners, commercial property owners and those ineligible for homestead status, which caps on property tax increases at 3 percent annually.

Vanessa Arellano Doctor
http://commercial-realestate-florida.xon.us

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