Florida House Bill 1371: Could Property Taxes Disappear in Florida?

Imagine owning a home in Florida without the burden of annual property taxes.

House Bill 1371 is stirring conversations statewide with its bold proposal to create massive property tax exemptions in Florida.

In this article, we'll break down what this bill entails and how it could impact you as a homeowner.

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What Is Florida House Bill 1371?

Florida House Bill 1371 (HB 1371) is a legislative proposal aiming to explore the elimination of all property taxes in the state.

The bill mandates a comprehensive study to assess the impact of replacing property tax revenue with a consumption tax.

This study would be conducted by the Office of Program Policy Analysis and Government Accountability (OPPAGA), ensuring a thorough examination of the potential economic and social effects.

HB 1371 is closely linked to House Joint Resolution 1369 (HJR 1369), a proposed constitutional amendment that seeks to introduce two new property tax exemptions:

• A $100,000 exemption from the assessed value of real property for all levies.
• A $250,000 homestead exemption for residential property owned by individuals aged 65 or older.

These proposals aim to reduce the tax burden on property owners and particularly support senior citizens.

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Has House Bill 1371 Passed Yet?

As of September 2024, HB 1371 has not yet been passed into law. The bill is currently under consideration in the Florida Legislature. For it to take effect, it must go through several steps:

1. Legislative Approval: Both the Florida House of Representatives and the Senate must approve HB 1371 and HJR 1369.
2. Governor's Signature: Once passed by the legislature, the bills require the governor's signature.
3. Voter Approval: The constitutional amendment proposed in HJR 1369 must be placed on the ballot for the November 2024 general election. It needs at least 60% voter approval to pass.

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Predicted Savings for Homeowners Per Year

If property taxes are eliminated in Florida, homeowners could save a significant amount each year.

For a home valued at $300,000, the current property tax rate of 0.89% means homeowners are paying about $2,670 annually.

If property taxes were completely eliminated, this amount would be saved in full. For seniors with the proposed $250,000 exemption, their savings would be around $2,225 per year.

For all other homeowners with a $100,000 exemption, their annual savings would be about $890.

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How Could the Elimination of Property Taxes Affect Homeowners?

Homeowners would save substantial amounts each year without the burden of property taxes.

For example, a homeowner with a property valued at $300,000 currently pays about $2,670 annually (based on an average tax rate of 0.89%). Eliminating this expense would directly increase disposable income, allowing homeowners to invest in renovations, pay off mortgages faster, or boost personal savings.

To compensate for lost revenue, the state might raise sales taxes, increasing the cost of goods and services for everyone.

For instance, if the sales tax increases by 3%, a household spending $50,000 annually on taxable items would pay an additional $1,500 in taxes each year.

This increase affects not just homeowners but all residents, including those who may not benefit from the elimination of property taxes.

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The Proposed Consumption Tax Replacement

The consumption tax replacement is being proposed as a way to make up for the revenue lost if property taxes are eliminated. Instead of taxing property, the state would raise money by increasing the sales tax on goods and services that people buy.

This means that while homeowners wouldn’t pay property taxes, they might spend a bit more on everyday purchases due to higher sales taxes.

The reasoning behind this is to spread the tax burden more evenly across all consumers, not just property owners. The idea is that by using a consumption tax, everyone contributes to state revenue based on what they spend, rather than only those who own property.

This approach aims to keep funding for important services like schools and infrastructure, even without property taxes. However, the potential downside is that all consumers, including those who don’t own homes, would face higher costs on purchases.

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Timeline: When Could These Changes Take Effect?

Key Dates to Watch:

• Legislative Session: HB 1371 and HJR 1369 are expected to be debated in the current legislative session.
• November 2024 General Election: If approved by the legislature, the constitutional amendment will appear on the ballot for voter approval.
• Voter Approval Requirement: At least 60% of voters must approve the amendment for it to pass.
• Effective Date: If approved, the changes would take effect on January 1, 2025.
• OPPAGA Study Deadline: The Office of Program Policy Analysis and Government Accountability must submit its study findings by July 1, 2025.

Frequently Asked Questions

Here are some common questions and answers regarding Florida House Bill 1371.

What is Florida House Bill 1371?

Florida House Bill 1371 is a proposed legislation that requires the Office of Program Policy Analysis and Government Accountability (OPPAGA) to conduct a study on the potential impact of eliminating all property taxes in Florida and replacing the lost revenue with a consumption tax.

What is the main goal of HB 1371?

The main goal of HB 1371 is to explore the possibility of phasing out and eventually eliminating Florida's property tax system.

When was HB 1371 introduced?

HB 1371 was filed on January 5, 2024.

Who sponsored HB 1371?

The bill was sponsored by Representative Ryan Chamberlin, R-Ocala, and the Ways & Means Committee.

What is the current status of HB 1371?

As of September 2024, HB 1371 has not yet been passed into law. The bill is currently under consideration in the Florida Legislature.

What would the OPPAGA study examine?

The study would examine the potential impact of eliminating all property taxes in Florida and replacing the lost revenue with a consumption tax.

When would the study results be due?

If passed, the bill would require OPPAGA to submit their findings to the President of the Senate and Speaker of the House Representatives by February 1, 2025.

How might this bill affect Florida's tax system?

If implemented, this bill could lead to the elimination of property taxes and potentially result in a significant increase in sales taxes to compensate for the lost revenue.

What are some potential benefits proponents claim for eliminating property taxes?

Proponents argue that eliminating property taxes could make housing more affordable, increase property ownership, and potentially lower overall taxes for most Floridians.

What concerns have been raised about the proposal?

Critics have raised concerns about the potential for a high sales tax rate, which could disproportionately affect low-wage workers. There are also concerns about the sustainability of such a system during economic recessions and the potential loss of incentives for local governments to maintain property values.

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Bottom Line: Who Benefits from These Changes?

The proposed elimination of property taxes in Florida, along with the introduction of a consumption tax, could be especially beneficial for homeowners, particularly seniors and those with higher property values.

Homeowners would enjoy substantial annual savings, potentially freeing up thousands of dollars each year.

For first-time buyers or those looking to reduce their ongoing housing costs, this could make homeownership more affordable and appealing.