Greetings Real Estate Investors!
This election day has a number of important issues on the ballot but by far the most important in terms of affecting real estate investors in Florida is Amendment 2.
The specific language for the measure is…
“Proposing an amendment to the State Constitution to permanently retain provisions currently in effect, which limit property tax assessment increases on specified non-homestead real property, except for school district taxes, to 10 percent each year. If approved, the amendment removes the scheduled repeal of such provisions in 2019 and shall take effect January 1, 2019.”
The keyword here that needs to be translated is “non-homestead” because what that actually means is investment property. Now investment properties are not the only non-homestead properties because as you probably know each property owner is only allowed to apply the homestead exemption to their primary residence that they must occupy. They also must be a Florida resident. So non-homesteaded property also primarily includes 2nd homes and vacation homes. However, a significant portion of this type of property are investment properties. And so the most important thing to know about this issue is…
If this amendment does not pass then there is NO limit to increases in property taxes on your investment properties.
That will significantly affect your bottom line because once the floodgates open then the politicians will surely not voluntarily limit themselves to 10% a year as this amendment would require them to. Rather they will get as much as they possibly can before their biggest supporters complain. This could mean a major hit to your income on a yearly basis. This would then avalanche to the need for raising rents which could push renters into purchasing their own homes and eventually reducing the overall value of the entire investment property market.
So today when you head to the polls remember to protect your investments by voting Yes on Amendment 2!