Pros And Cons Of Amendment 5

Amendment 5
Amendment 5 could bring some much needed relief to Florida homeowners.

Later this year, Floridians will get a chance to vote on Amendment 5 on the November ballot. You may be wondering what Amendment 5 is? In a nutshell, this amendment would provide an increase in the value of homestead exemptions through adjustments to match inflation. Needless to say, with inflation rising out of control for the past few years, the existing homestead exemption amount does not offer nearly as much value as it did before. In other words, as the cost of living increases, so would the tax break afforded to those eligible for homestead exemptions. Of course, these additional exemptions would be Florida residents that own and live in their own homes throughout The Sunshine State.

Pros of Amendment 5

Given the number of people moving to the State of Florida over the past several years, we have seen incredibly strong demand for housing. This increased demand combined with a persistently tight inventory of homes for sale has led to skyrocketing home prices. Should Amendment 5 be passed, this would provide much needed relief for many Florida homeowners. In fact, this could allow many of these homeowners to remain in their homes. Unfortunately, with skyrocketing insurance costs and overall cost-of-living expenses, we have already seen many residents need to move to less expensive areas.

Cons of Amendment 5

Critics of Amendment 5 state that by increasing the tax breaks to homeowners, we are simply shifting these expenses to business owners, renters, and local governments. Although the state government relies on sales taxes, local governments throughout the state rely heavily on property taxes for their revenues in order to pay for services such as police, fire, and public parks.

How would Amendment 5 work?

First of all, to learn more about what the homestead exemption in Florida is, click here. Essentially, Floridians who own their home and declare it as their primary residence are eligible for the homestead exemption. There are two exemptions that each currently knock $25,000 off the taxable value of a home. This ultimately reduces the overall tax bill.

Should Amendment 5 pass, the second of the two exemptions would be adjusted to increase at the rate of inflation. It is important to note that this exemption does not impact taxes paid to schools. For example, if the rate of inflation is at 9%, it would increase the value of the second exemption from $25,000 to $27,250. This adjustment would be based on the percent change in the Consumer Price Index for All Urban Consumers, for U.S City Average. If approved, this amendment would go into effect in 2025.

Summary

In closing, many homeowners will likely be in favor of amendment 5. Of course, there may be others that may be opposed. As always, it is important to research the various amendments on the ballot and vote accordingly.

Are you looking to buy or sell a property in the South Florida area? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, don’t forget to download the free Florida Home Search app for your smartphone or tablet.

By natasha moore

REALTOR® with Live South Florida Realty, Inc.