This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0975.LAV
DATE: 2/3/2022
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 975 Homestead Exemptions for Low-income Seniors
SPONSOR(S): Borrero
TIED BILLS: HJR 973 IDEN./SIM. BILLS: SB 1280
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Local Administration & Veterans Affairs
Subcommittee
Darden Miller
2) Ways & Means Committee
3) State Affairs Committee
SUMMARY ANALYSIS
The Florida Constitution requires all property to be assessed at just value as of January 1 of each year for
purposes of ad valorem taxation. Ad valorem assessments are used to calculate property taxes that fund
counties, municipalities, district school boards, and special districts. The taxable value against which local
governments levy tax rates each year reflects the just value as reduced by applicable limitations and
exemptions allowed by the Florida Constitution. One such exemption is on the first $25,000 of assessed value
of a homestead property, which is exempt from all taxes. A second homestead exemption is on the value
between $50,000 and $75,000, which is exempt from all taxes other than school district taxes.
The bill implements the amendments to ss. 4 and 6, art. VII of the Florida Constitution, proposed by HJR 973,
by:
Providing that assessed value of homestead property owned by a low-income senior may not exceed
the assessed value as of the January 1 on the year the property owner applied for and became eligible
for the limitation;
Revising an existing optional additional homestead exemption for low-income seniors that may be
provided by a county or municipality from taxes levied by that government to give those governments
the option of exempting either up to $50,000 of the assessed value or the entire assessed value of the
property; and
Creating a new additional homestead exemption for low-income seniors who have lived in their
homestead for at least 20 years and the homestead has a just value of less than $300,000 at the time
the application for the exemption is filed.
The Revenue Estimating Conference estimated that if the constitutional amendment is approved by the
voters, that the bill would have a recurring negative impact on local government revenues of $44.2 million per
year ($9.8 million in school funds and $34.4 million in non-school funds).
This bill takes effect on the same day that the constitutional amendment proposed by HJR 973, or a similar
joint resolution, takes effect if approved by the voters, which is January 1, 2023.
This bill may be a county or municipality mandate requiring a two-thirds vote of the membership of the
House. See Section III.A.1 of the analysis. STORAGE NAME: h0975.LAV PAGE: 2
DATE: 2/3/2022
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Ad Valorem Taxation
The Florida Constitution reserves ad valorem taxation to local governments and prohibits the state from
levying ad valorem taxes on real and tangible personal property.
1
Ad valorem taxes are annual taxes
levied by counties, cities, school districts, and certain special districts. These taxes are based on the
just or fair market value of real and tangible personal property as determined by county property
appraisers on January 1 of each year.
2
The just value may be subject to limitations, such as the “save
our homes” limitation on homestead property assessment increases.
3
The value determined after
accounting for applicable limitations is known as the assessed value. Property appraisers then
calculate taxable value by reducing the assessed value in accordance with any applicable exemptions,
such as the exemptions for homestead property.
4
Each year, local governing boards levy millage rates
(i.e. tax rates) on taxable value to generate the property tax revenue contemplated in their annual
budgets.
Property Tax Assessment Limitations Exemptions Available to Seniors
Homestead Exemption
Every person having legal and equitable title to real estate who maintains a permanent residence on
the real estate (homestead property) is eligible for a $25,000 tax exemption applicable to all ad valorem
tax levies, including levies by school districts.
5
An additional $25,000 exemption applies to homestead
property value between $50,000 and $75,000. This additional exemption does not apply to ad valorem
taxes levied by school districts.
Additional Homestead Exemption for Low-Income Seniors
The Florida Constitution authorizes the Legislature to allow counties and municipalities, by general law,
to grant an additional homestead exemption to persons aged 65 or older with a household income that
does not exceed $20,000 (low-income seniors).
6
The income limitation is adjusted each year to reflect
changes in the consumer price index.
7
For 2022, the income threshold for this exemption is $32,561.
8
An owner must hold legal or equitable title to the property and maintain it as his or her permeant
residence to qualify for the exemption.
9
If title to the property is held jointly with a right of survivorship,
the exemption may be claimed if one of the owners is residing on the property and would otherwise
qualify.
10
Under this section of the Constitution, a county or municipality may grant either (or both) of
following exemptions:
An additional $50,000 of homestead exemption for all low-income seniors;
11
or
1
Art. VII, s. 1(a), Fla. Const.
2
Art. VII, s. 4, Fla. Const.
3
S. 193.155(1), F.S.
4
S. 196.031, F.S.
5
Art. VII, s. 6(a), Fla. Const.
6
Art. VII, s. 6(d), Fla. Const.
7
S. 196.075(3), F.S.
8
Fla. Dept. of Revenue, Two Additional Homestead Exemptions for Persons 65 and Older (Revised January 2022), available at
http://floridarevenue.com/property/Documents/AdditionalHomesteadExemptions.pdf (last visited Feb. 2, 2022).
9
Art. VII, s. 6(d), Fla. Const.
10
S. 196.075(8), F.S.
11
Art. VII, s. 6(d)(1), Fla. Const. STORAGE NAME: h0975.LAV PAGE: 3
DATE: 2/3/2022
The entire assessed value of the homestead property, if the just value is less than $250,000 in
the year the low-income senior owner applies for the exemption, and the owner has maintained
a permanent residence on the property for at least 25 years.
12
The exemption authorized under this section only applies to ad valorem taxes levied by the county or
municipality granting the exemption.
13
This includes taxes levied by dependent special districts or
municipal service taxing units of the government granting the exemption.
Save Our Homes Assessment Limitation and Portability
The Florida Constitution limits the amount of change in the assessed value of a homestead property as
of each January 1 to the lesser of three percent or the percentage change in the Consumer Price Index
(CPI).
14
This cap on the change in the assessed value is called the Save Our Homes (SOH)
assessment limitation and the accumulated difference between the assessed value and the just value
is the SOH benefit.
15
If there is a change in ownership
16
and a new homestead is established, the property must be
assessed at just value as of January 1 of the year following the change unless the new owner transfers
a SOH benefit from a previous homestead to the new homestead.
17
The ability to transfer the SOH
benefit is known as portability. A homestead property owner may transfer up to $500,000 of the SOH
benefit to the new homestead if the owner received a homestead exemption as of January 1 in any of
the immediately preceding three years.
18
Beginning January 1, 2017, an owner of homestead property
that was significantly damaged or destroyed as the result of a hurricane or tropical storm may elect to
abandon his or her homestead as of the date of the storm, even if a homestead exemption was
received in the following year, and transfer the SOH benefit to a new homestead within three years of
the storm.
19
Improperly Granted Homestead Exemptions
Florida provides several property tax exemptions for homestead property.
20
Since Florida’s homestead
tax exemptions require that the property owner use the homestead property as a permanent residence,
a property owner can only have one exempt homestead.
If a property appraiser determines that for any year or years within the prior 10 years a property owner
was granted a homestead exemption, but was not entitled to it, the property appraiser must send the
owner a notice of intent to file a tax lien on any property owned by the owner in that county.
21
The
property owner has 30 days to pay the taxes owed, plus a penalty of 50 percent of the unpaid taxes for
each year and 15 percent interest per annum. If not paid within 30 days of notice, the property
appraiser may file a tax lien.
22
The tax lien remains on the property until it is paid or until it expires after
20 years.
23
12
Art. VII, s. 6(d)(2), Fla. Const.
13
S. 196.075(4)(b), F.S.
14
Art. VII, s. 4(d)(1), Fla. Const. and s. 193.155, F.S.
15
See Fla. Dept. of Revenue, Save Our Homes Assessment Limitation and Portability Transfer Brochure,
http://floridarevenue.com/property/Documents/pt112.pdf (last visited Feb. 2, 2022).
16
A change of ownership is any sale, foreclosure, or transfer of legal title or beneficial title in equity to any person. See s. 193.155(3),
F.S.
17
Art. VII, s. 4(d)(3), Fla. Const.
18
Art. VII, s. 4(d)(8), Fla. Const.; s. 193.155(8), F.S. The three-year timeframe is calculated from the time the old homestead exemption
is abandoned and not the sale of the old homestead. See supra note 15.
19
S. 193.155(8)(m), F.S.
20
See, e.g., ss. 196.031, 196.071, 196.075, 196.081, and 196.091, F.S.
21
Ss. 196.011(9)(a), 196.075(9), and 196.161(1)(b), F.S.
22
Id.
23
S. 95.091(1)(b), F.S. STORAGE NAME: h0975.LAV PAGE: 4
DATE: 2/3/2022
If a homestead exemption is improperly granted as a result of a clerical mistake or an omission by the
property appraiser, the person improperly receiving the exemption shall not be assessed penalty and
interest.
24
Effect of Proposed Changes
The bill implements the proposed constitutional amendment in HJR 973.
Homestead Assessment Limitation for Low-Income Seniors
The bill provides that the assessed value of homestead property owned by a low-income senior may
not exceed the assessed value as of January 1 of the year the property owner applied for and became
eligible for the limitation. If title of the homestead property is held jointly with a right of survivorship, a
person residing on the property who meets the requirements may receive the entire amount of the
limitation and the limitation carries over to a surviving spouse who uses the property as a homestead
and meets the requirements of the statutory section.
The bill provides procedures if a property appraiser determines the property owner was granted the
limitation, but was not entitled to it, that parallels the procedures and penalties for improperly granted
homestead exemptions.
Additional Homestead Exemption for Low-Income Seniors
The bill provides that the governing body of a county or municipality may adopt an ordinance to allow
an additional homestead exemption for low-income seniors of either up to $50,000 of the assessed
value of the property or the entire assessed value of the property. If the county or municipality provides
an exemption equal to the entire assessed value of the property, that exemption does not apply to
taxes levied for the payment of bonds or taxes authorized by a vote of the electors pursuant to s. 9(b)
or s. 12 of art. VII of the Florida Constitution.
The bill creates a new homestead exemption for low-income seniors. This exemption applies to the
entire assessed value of the property and applies to all ad valorem levies other than school district
levies. To qualify for the exemption, the low-income seniors must own a homestead property with a just
value of less than $300,000 in the year the application for the exemption is filed and must have
maintained their permanent residence at the homestead for at least 20 years. The bill provides that,
beginning January 1, 2024, and annually thereafter, the $300,000 just value limitation must be adjusted
to reflect the percentage change in the All-Transactions House Price Index for Florida, not seasonally
adjusted, for the most recent four-quarter period ending September 30 of the prior year.
The bill provides that any low-income senior who received in 2022 the county or municipal additional
homestead exemption based on residency and just value repealed by HJR 973 and other provisions of
the bill qualifies for the new homestead exemption based on residency and just value on January 1,
2023, regardless of the just value of that homestead on January 1, 2023.
The bill states that if a county or municipality elects to increase the additional homestead exemption for
low-income seniors from $50,000 of assessed value to the entire assessed value, the county or
municipality may grant the new exemption to existing recipients of the old exemption without requiring a
new application.
The bill provides that the changes made by the bill first apply to the 2023 tax roll.
B. SECTION DIRECTORY:
Section 1: Creates s. 193.626, F.S., providing homestead assessment limitations for certain
persons aged 65 or older.
24
Ss. 196.011(9)(a), 196.075(9), and 196.161(1)(b), F.S. STORAGE NAME: h0975.LAV PAGE: 5
DATE: 2/3/2022
Section 2: Amends s. 196.075, F.S., concerning an additional homestead exemption for persons
aged 65 or older.
Section 3: Authorizes the Department of Revenue to adopt emergency rules to administer the act.
Section 4: Provides that the amendments made to s. 196.075, F.S., and the creation of s. 193.626,
F.S. shall first apply to the 2023 tax roll.
Section 5: Provides that the bill shall take effect on the effective date of the amendment to the
Florida Constitution proposed by HJR 973, or a similar joint resolution having
substantially the same specific intent and purpose, if such amendment is approved at
the next general election or at an earlier special election specifically authorized by law
for that purpose.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
The Revenue Estimating Conference (REC) determined that the revenue impact of the bill on local
governments is zero/negative indeterminate because the bill is contingent upon passage of the
constitutional amendment proposed by HJR 973. If the constitutional amendment does not pass,
the impact of the bill is zero. If the constitutional amendment is approved by the voters, the REC
estimated that the bill would have a recurring negative impact on local government revenues of
$44.2 million per year ($9.8 million in school funds and $34.4 million in non-school funds).
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
If HJR 973 is approved by at least 60 percent of voters, and this bill therefore goes into effect, low-
income seniors will realize lower property taxes than would otherwise occur.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
The county/municipality mandates provision of Art. VII, subsection 18(b), of the Florida Constitution
may apply because this bill will create an additional ad valorem homestead exemption which may STORAGE NAME: h0975.LAV PAGE: 6
DATE: 2/3/2022
reduce the authority of municipalities and counties to raise revenue. This bill does not appear to
qualify under any exemption or exception. If the bill does qualify as a mandate, final passage must
be approved by two-thirds of the membership of each house of the Legislature.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
This bill authorizes the Florida Department of Revenue to adopt emergency rules to administer the act.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES