Portable tax break might not be magic cure
Jan 6, 2008
Skeptics say it won't work.

A key feature in the $9.3 billion property tax relief package on the Jan. 29 ballot, portability would allow homeowners to take some or all of their savings from the Save Our Homes amendment with them when they move.

The theory is that homeowners who have benefited from years of a 3 percent annual property tax assessment cap are locked in their current homes because they don't want to lose their low tax bills when they move.

The assessment cap clock resets when a homeowner buys a new home, limiting only future increases. Add the extra inducement to sell, supporters say, and home sales will spark.

But critics say the theory is shaky at best.

"If the market is depressed and there are homes for sale and nobody's buying them, you can't simply expect that offering more homes for sale will make a difference," said veteran Florida economist Hank Fishkind.

In general, economists say the housing market is cooling after two years of scorching sales and rising property values.

Most don't expect a recovery until next year.

The same experts also say that home sales are driven more by the availability and affordability of home loans and homeowners insurance than they are by property taxes.

While Amendment 1 and its portability provision will have some positive benefit, it doesn't address the larger economic factors contributing to the dark cloud over the market, according to Sean Snaith, an economist with the University of Central Florida.

"It's not going to overcome credit market issues, and it's not going to overcome the surpluses in the housing stock," Snaith said.

Gov. Charlie Crist, the amendment's biggest supporter, often describes the tax package as a way to spur Florida's economy, which he likens to a thoroughbred being reined in on the race track.

Considering that Florida's annual gross domestic product is about $770 billion, and expected to top $1 trillion in the coming years, a $9.3 billion jolt of property tax relief spread over five years isn't as big as it sounds, experts say.

"It's pretty much small change," said Snaith.

Economists with the Florida Legislature predict that portability would likely save homeowners $2.7 billion over the next five years, although they are careful to say that that element of the tax package is the most difficult to predict.


Jim Ash
News Journal capital bureau
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