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Recapture Rule Astounding Florida Taxpayers

Posted by Benjamin Dona on Tuesday, September 23rd, 2008 at 11:05pm.

Imagine the surprise of over a million Florida residents who received their proposed 2008 real estate tax assessments expecting to see a tax decrease (based on the passage of the Amendment I) and finding out their taxable value has actually may have gone up by 3%. How is this possible you say, especially considering almost everyone's market value has dropped in the last two years? Welcome to the world of the state's "down-means-up recapture rule."

The rule was adopted way back in 1995 by the state's Department of Revenue with the full backing of then Governor Lawton Chiles. In fact, they even went to court when a group of county property appraisers challenged the rule prior to its being passed by the Florida Cabinet. Unfortunately, the administrative law judge hearing the case approved the rule calling it "an appropriate way"  to apply the Save our Homes Amendment when property values go down (try and figure this one out).

The recapture rule came about from a quirk in the original Save Our Homes Amendment. While the amendment limits the annual assessment increases for homesteaded primary residences to no more than the annual increase in the Consumer Price Index or 3%, whichever is less, it failed to address what happens when market values go down. Governor Chiles and the Florida Cabinet stepped in to adopt the recapture rule to cover that situation. It requires the annual assessment to increase no matter if a home's market value goes up, down or stays the same. The only limit is that an assessment cannot exceed a home's market value. Up until last year, the rule had little to no effect as property values were continually rising to some degree, year over year. But now that the real estate market has gone into decline, thousands of Florida homeowners are feeling its bite. And, it looks like it may take another constitutional amendment in order to overturn the current rule.

As we all know well, that can't happen overnight. Evidently, it also looks like a couple of our lawmakers are going to try and introduce legislation to repeal the rule during the next regular session. However, that won't help with this year's tax bills. When you combine this fiasco with the Florida Supreme Court recently shooting down the second round (Amendment V) of real estate tax reform, it doesn't take a rocket scientist to figure out that there will be no substantial tax relief for the residents of Florida anytime soon.

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About the Author

Gulf Coast Associates, RealtorsBenjamin Dona is the Broker and Owner of Gulf Coast Associates, Realtors in Bonita Springs, Florida. He holds two advanced degrees, an MBA and an MA, and has an extensive background in both business and marketing. In 1998, he founded Gulf Coast Associates, and formed a group of like-minded Realtor® associates dedicated to offering professional Southwest Florida real estate services by concentrating on information, education and the use of leading edge technologies. He also is a recognized expert on the "Net," a much-quoted and read blog author, and a contributor to both national and international news outlets. Benjamin is a member of the National Association of Realtors, the Florida Association of Realtors, and numerous local real estate boards throughout Southwest Florida.

Contact Benjamin Dona at 239-948-3955



11 Responses to "Recapture Rule Astounding Florida Taxpayers"

James Boyer Chatham NJ wrote:
Sounds like a typical government. Always looking for a loophole to stick it to the little guy. I personally think that there should be constitutional amendments which bar attorneys from holding elected office, or lobbying elected officials.

Posted on Wednesday, September 24th, 2008 at 9:48am.

Benjamin wrote:
That would be a good one Jim.

I'm still trying to figure out how the idiots here keep re-electing politicians like Nelson and Wexler. Their stupidity is beyond belief.

Posted on Wednesday, September 24th, 2008 at 8:39pm.

Steve wrote:
Attorneys holding office is a disgrace and should not be allowed. It opens up the Justice system to weasels whose only reason for being there is to thrust themselves into the limelight required to win office.

Posted on Thursday, October 2nd, 2008 at 7:52pm.

Benjamin wrote:
Well said!

Posted on Thursday, October 2nd, 2008 at 10:11pm.

Curtis Reddehase wrote:
We elect idiot politicians on every level of the government.

Posted on Saturday, October 11th, 2008 at 6:12pm.

Zach wrote:
Wow... would not have expected this. Thanks for the information.

Posted on Monday, October 13th, 2008 at 11:14am.

Andrea in Westlake wrote:
That is pretty darn crummy. In a time like this, the last thing homeowners need is rising property taxes, especially when they budgeted for them to be lower. I wish more local politicians were really watching out for their constituents, so this type of thing wouldn't happen.

Posted on Saturday, October 18th, 2008 at 5:19pm.

James Boyer wrote:
We have it the same way here in New Jersey, the voters just keep putting the same fools who are driving all the good paying jobs out of the state. They keep anyone from developing private land if at all possible, then they wonder, year after year, why the real estate and income taxes keep going up and up. I just don't understand how the public can be so ill informed.

Posted on Monday, October 20th, 2008 at 9:50am.

Geoff wrote:
Well said Curtis! Unfortunately it's true. Post covers the very unfair way the taxes are governed.

Posted on Tuesday, October 21st, 2008 at 4:55am.

Benjamin wrote:
What kills me is that the population just keeps doing the same stupid thing over and over again when it comes to electing the fools into their positions. You'd think they would eventually figure it out.

Posted on Tuesday, October 21st, 2008 at 5:28pm.

Barry Cox wrote:
Yeah, I was a little surprised myself when I got my tax bill here in AZ a couple of months ago. I figured that since my property value has decreased, I would be in line for lower property taxes as well. Nope, not the case. The gov will always find a way to get their $$.

Posted on Thursday, October 23rd, 2008 at 9:04pm.



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