This summer I had posts on “Texas lousy for retirement home” and residential property tax rates across the United States.
At first, Florida property tax rates don’t look high but not terrible at $7.89 per $1,000 of assessed value compared to Arizona’s $6.11 per $1,000. (Texas is $18.17 per $1,000!)
But it turns out Florida has a two-tier system of property taxes where new Florida homeowners pay more property taxes than long time homeowners.
is florida over?
An excellent article in the Wall Street Journal Online detailed the slowing growth in Florida. (I was surprised that even public school enrollment is down in Florida!)
The item that really caught my eye, however, was about Florida property taxes.
Florida property taxes
… the state has created a two-tiered tax system that hit newcomers and part-time residents harder than longer-term residents. For tax purposes, permanent residents receive a $25,000 “homestead” reduction in the assessed value of their home, which reduces their property taxes. A 1992 amendment to the state’s constitution caps the annual increase in residents’ assessed home value at 3% a year or the rate of inflation, whichever is lower.
The effect is that over the past few years, as home values have soared, newcomers have paid higher tax bills. For instance, the owner of one North Tampa house assessed at $214,764 paid $1,992 in taxes last year, according to the Hillsborough County property appraiser’s office. A new owner, who made it his primary residence, would pay about $3,820 in taxes next year…
Arizona doesn’t discriminate against new homeowners.
Arizona treats new homeowners fairly and with respect. New homeowners in Arizona don’t pay extra property taxes like they do in Florida (and California).
This is especially important for retirees.
Florida homeowners insurance costs
The article also mentions that the very high homeowners insurance costs in Florida have also hurt growth.
Rising insurance rates prompted by hurricanes are also eroding Florida’s appeal. The average premium for homeowner’s insurance in Florida was $929 in 2004, the fourth-highest of any state in the country. In Hillsborough County, rates on a five-year-old $150,000 house range from $940 to $2,313 a year.
Advantage, Arizona. We don’t have hurricanes. (Or earthquakes for that matter.)
Anyone planning to buy a sunny retirement home or second home should be sure to include the costs of property taxes and homeowners insurance when calculating the costs of owning a home. You have to pay property taxes and homeowners insurance every year so those costs really add up fast.
Looking for a retirement home
When you take into account property taxes and homeowners insurance, you’ll find that living in Arizona is even more beautiful.
Call me if you would like more information about buying a retirement home or second home in beautiful, fair Arizona.
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Jan Lentz 10.02.07 at 1:20 pm
Yes, I must say I think FL IS “over.” I have lived here since1989 and have seen this nice, inexpensive place to live turn sour! The quality of life has tanked due to Jeb and Co.’s PAVE OVER FLORIDA rampage for eight years. Yes, Jeb stacked the deck in favor of his wealthy developer/builder cronies (who also contributed generously to his and George’s political coffers in gratitude) and the chaotic development, crowded roads, speculators who drove real estate prices to nearly double from 2000 to 2005 and then precipitously crash, yes, with the cherry on top being the hurricanes and resultant homeowners insurance spikes–all created the perfect storm to drive many out of Florida. The patently unfair tiering of “old” and “new” homeowners, an unforeseen bad effect of inept Republican clowns who have controlled the FL legislature for far too long, bounced my taxes on a home carrying $600 taxes to $1500, yes, $1500 on a sumptuous 1,008 s.f. house!! My taxes are equal to the largest and most valuable properties in the subdivision, double or more in size, simply because I am a newcomer–never mind the fact that I have probably been a permanent, full-time resident longer than most of my retiree neighbors! Yes, before you decide to buy in a new location–check these tax, insurance and fees issues out before you make an offer! My plan is to hie myself to the Carolinas and never look back. Regards, JL
RE: Investor 10.02.07 at 2:54 pm
I must say that is why I purchased my investment properties in Arizona long before it was “fashionable”. Other states seem to have higher property taxes in most areas. The only place that I cannot figure out why their taxes are higher here is Pinal county. They have the smaller populous by far compared to Maricopa, yet their property taxes are outragous. It seems to me they need to use some of the coffers of over priced taxes there and build some roads and infrastructure and quit complaining that they don’t have money. Where do all those high taxes go then?
john q 10.05.07 at 12:41 am
Floridians are very self-centered, as you see with the two-tier tax system. People who moved there before 1992 or 2000 are favored at the expense of newcomers, and most of the newcomers don’t figure that out until six months to a year after they move. Who benefits most? The wealthy of course, because they have the most valuable homes that are grossly undertaxed. Where are the teachers, police officers, firemen and for that matter, store clerks, going to come from?
Joe 09.14.08 at 6:51 pm
great your real estate taxes look good but what are the taxes on a motor home are they caluclated as a house??? I have a motor home with a current value of 149,000 any estimate on the taxes?? thanks joe
we have been looking at SC, Fl and Az what are the biggest advatages of AZ?? thanks
darla37 02.15.09 at 12:23 am
I am a Canadian looking at buying property in Florida. Many Canadians would like to own in florida but are scared off by the double tiered system for property taxes. As a non resident our property taxes would go up by 10%/yr vs 3% for residents. Can someone explain why residents who are there temporarily 3-4months a year ..who do not use as many of the city services i.e. water, sewer, garbage, schools, roads etc pay a disproportionate amount of taxes. Also I thought that this would be classified as discrimination. Also wasn’t the US founded on the basis that they didn’t like taxation w/o representation i.e. Britain..well then what is Florida doing…Also just a thought, if you would like people to buy some of these homes that are being foreclosed on maybe if the taxes werent so high people may have intervened before it got to this stage of a disaster..I think Florida better rethink this taxation issue because alot of foreigners are staying out of the florida market..cheaper to rent each season…Disappointed purchaser.
John Wake 02.15.09 at 1:05 am
darla, if you want to be treated fairly, buy a vacation home in Arizona. Your property tax rate will be the same as your American neighbors and recent buyers don’t pay a higher rate than earlier buyers like in California.
JanisL 02.15.09 at 10:47 am
Canadians, I am not sure if non-residents are taxed differently than new as opposed to old owners. The gist of the mess that is FL property tax regulations is (thanks to corrupt GOP controlling our legislature):
sock it to new buyers (your tax is based on purchase price) and give a huge break to long-time owners, every year. The disparity grows with time. No realtor will warn you about the big jump tax will take AFTER you buy the property. Socalled Amend. 10 was patently unfair and Amend. 1 passed last year to give some relief by our ineffective governor, provides “portability”–you can take your Amend. 10 advantage with you to new home–makes this mess even more unfair! The newbies are subsidizing the “oldies” and tax bill can be two or three times what your seller paid! Buyer beware, this state and its counties is run by a bunch of yutzes!
brett 07.11.09 at 10:21 am
well it seems like the property tax in FL seems to be a little much, but i think it would still be worth it to become a new homeowner and live there. one big reason alot of people want to move to FL is no state income tax. actually FL is rated low for tax burden. property tax might be the tax that they can create good revenue from without creating other new taxes. because they get about 70 million visitors and tourists, or part time homeowners a year. it would make sense to put a tax there.