Level 15

Florida's High Taxes

Forum|Forum|3 years ago
November 21, 2022
2 replies
29 views

New homeowners in Florida are finding that life in a state with no income tax can mean life in a state with high property taxes. Florida has a law similar to California’s Prop 13, that limits annual property tax increases to 3% (or CPI increase, if less) but starts the valuation anew when the property is sold. That can triple the taxes for the new owner.

https://www.businessinsider.com/florida-homebuyers-shocked-by-skyrocketing-property-taxes-2022-11

I have seen this happen with Arizona taxpayers moving to Texas. Arizona, until recent years, has had fairly high income-tax rates, but low property taxes. Upper-middle-class taxpayers would pay maybe $4,000 combined income and property taxes. Moving to Texas, they would pay that much or more, just in property taxes.

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qbteachmt

Level 15

Make sure they submit for the Homestead exemption, if that applies.

Don't yell at us; we're volunteers

M

MMtaxMM

Level 3

Real world example with a HNW individual and spouse relocating from IL to FL in 2021. This is with the homestead exemption.

IL residence custom built in 1987 and sold in 2021 for $749k. Last property tax bill was just over $24k because the property assessment was out of whack by several hundred thousand. Bought house in N Naples which was appraised at $2.97 million in 2021 and $3.06 million in 2022. Property tax was $32k in 2021 and $31.7k in 2022. The guy saved, by my estimation, $30-40k in IL income tax (he's an FC with a ton of HNW clients in FL). So there's that.

Personally, I sold a commercial building in IL last year and got slapped with a ~15K tax bill which was all depreciation recapture (fully depreciated from 1989 which reduced basis to $0). The dumb thing had hardly appreciated in all those years.

I've got tons of other examples that contradict that article but I'll spare everyone.

IRonMaN

Level 15

But, when was the last time a hurricane hit IL?

Slava Ukraini!

BobKammanAuthor

Level 15

@IRonMaN There should be trigger warnings here. That brought back memories of my first winter in Chicago, coming from sunny Arizona, and the Great Storm of 1967.

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