Property owners will save a reported $2B but tourism and economic development suffer.
PALM COAST. FL – May 10, 2017 – The Florida legislature has finished the 2017 session with a flurry of notable decisions. From a Realtor’s perspective, there were wins along a broad front but budget cuts to Enterprise Florida and Visit Florida are cause for concern.
Cap on Estoppel Certificate Fees: Sellers who live in a community governed by a Homeowners Association, a Condominium Association or Co-Op (more common in South Florida), are required to provide an Estoppel Certificate disclosing the status of their dues and assessments account. This information is required to close real estate transactions. The document is provided by the association management company for a fee paid by the seller. SB 398 places a cap on these fees. Effective July 1, 2017
Business Rent Tax Reduction: Florida is the only state that levies a sales tax (6%) on business rents. Chambers of Commerce and Realtors have joined together for years to reduce or eliminate this tax. A reduction to 5.8 percent was passed. While modest, it is a start in the right direction and is projected to save business $60M annually. Effective January 1, 2018
10 Percent Cap on Non-Homestead Property Tax: A 2008 referendum created a 10 percent cap on the annual increase in taxable property values for all non-homestead properties. This referendum sunsets after ten years, ending January 1, 2019. HJR 21 puts the question in front of voters again November 2018, with one difference; the cap will be permanent.
Additional Homestead Tax Exemption: HJR 7105 puts a constitutional amendment on the 2018 ballot that would allow homesteaded property owners to shield an additional $25,000 of the value of their home from non-school property taxes. The exemption will apply to the portion of the value between $100,000 and $125,000. If passed by 60 percent of voters, the added exemption will become effective January 1, 2019.
Local Governments Preempted from Drone Regulation: Aerial photography via drones has become a powerful marketing tool for Realtors. Over 400 local governments will now be prohibited from enacting local ordinances governing drone operations.
Did Not Pass
Restrict Local Regulation of Vacation Rentals: Proposed legislation that would have neutered a 2014 statute that had returned control over short-term vacation rentals to local governments died. The state had preempted rental control from local governments in 2012. The 2012 legislation resulted in many homes, particularly in Ocean Hammock, being rented to large groups, in some cases more than 20 individuals. Some neighboring residents referred to the large rental homes as "mini-hotels." The 2017 bill would have required local ordinances controlling vacation rentals to apply equally to all properties, not singling out vacation rentals. The proposed 2017 bill passed the house but died on the senate floor. The 2014 statute allowing local control of vacation rentals (except for limits on rental frequency or duration) will remain in effect. Flagler County's current ordinance limiting occupancy was adopted after the 2014 legislation. That ordinance is currently undergoing a legal challenge from a vacation rental property owner.
The new budget dramatically cuts funding to Enterprise Florida (economic development) and Visit Florida (tourism marketing). These cuts underscore the divide separating legislative leaders and Governor Scott. They are not viewed by GoToby.com, Florida Realtors and the Florida Chamber of Commerce as positive moves.