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Florida’s lack of an income tax has placed a high burden on property taxes to cover the burden of running the state. Excemptions that keep increases on properties held long term have kept families rooted to their old homes instead of letting families expand or contract the size of their homes.

With the newly enacted Save our Homes excemption, these homeowners can now transfer the long term tax excemption to their new homes.

There’s a second exemption, called Save Our Homes. If the market value of a house rises, for example, from $100,000 to $110,000 in a year, or to $200,000 in 10 years, the county tax assessor can raise the market value of the house by only 3 percent per year. So a house worth $100,000 in 1998 can have a maximum market value of only $134,000 in 2008.
That means the cumulative effect of Save Our Homes is enormous.
On Jan. 29, Florida voters approved Amendment 1, which allowed homeowners to transfer the Save Our Homes exemption when they bought a new home. Its feature, called portability, would help sell homes, real estate agents said. People had been living for years in homes that were too large or too small, and that big tax break would be the catalyst for trading places. via Highlands Today

Here is my question. If long term residents accrue tax excemption over time and government does not shrink, doesn’t that create an even greater burden on new residents?

At what point does the high tax rate keep families from making the decision to move to Florida? And what does that do to the long term viability of Florida housing demand?

Related posts:

1. Bankruptcies Surge in Massachusetts as Families Try to Save Their Homes
2. Florida Government Surprised By Lower Real Estate Tax Reciepts
3. Florida Sweating Under Heavy Property Tax Load As Legislature Debates
4. Texas Hard Hit By Foreclosures as High Taxes Hurt Homeowners
5. Real Estates Top End is Moving Fast, Lower and Average Homes Not Selling Well