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Here's a good article from the "Daily Real Estate News", Florida Association of Realtors

December 31, 2007

5 Simple Ways to Increase a Home's Value

Good home maintenance is key to creating and preserving a home’s value. Not to mention, it also impresses potential buyers.

Here are five basic steps that every home owner ought to take — before spending money on dream bathrooms or gourmet kitchens.

1. Safety. Make sure smoke detectors and carbon monoxide detectors are installed and in good working order. Check fuel-burning appliances to make sure they are properly vented and no gas connections leak. Make sure the electrical system is adequate. Flickering lights and popping breakers are the sign of a problem. Anchor handrails and grab bars adequately.

2. Preventive maintenance. Repair any leaks in the roof, seal gaps in the siding, paint bare wood, replace damaged decking, patch cracks in concrete, and caulk around tubs and showers.

3. Conserve energy. Install a programmable thermostat, weatherstrip doors and windows, fix leaking faucets, upgrade insulation, and replace leaky windows.

4. Go green. Consider environmentally friendly materials for windows, doors, siding, decking, fencing, roofing, flooring, and insulation.

5. Improve comfort. Get rid of clutter, open up spaces, update window treatments to allow in more light, and organize closets and storage.

Source: The Associated Press, James and Morris Carey (12/29/07)

On Tuesday, January 29^th, 64% of Florida Voters approved Amendment 1 involving property taxes.

How will this help the average homeowner? Not much as the average savings per homeowner will be only $20 per month ($240 per year). These tax savings do little to offset the huge tax INCREASES many experienced during the real estate boom a couple of years ago when property values skyrocketed.

Many argue that the solution to our property tax woes in Florida lies with limits on government spending, not taxation.  During the recent real estate boom, the revenues and budgets of our local city and county governments exploded, growing at much higher rates than the rates of population growth, per capita income growth, or inflation. Instead of saving this extra money for a rainy day, or giving it back to the taxpayers, these governments spent every penny. These same governments now complain they will have to slash emergency services and other high priority programs due to amendment 1’s approval.  Our emergency services and high priority programs were funded properly and were working great prior to the real estate boom and its higher revenues, therefore they ought to be just fine as tax revenues return to the same reasonable levels before the real estate boom.

One bright spot in all of this is the portability issue that Amendment 1 addresses. Many homeowners have been unwilling to move up into larger, more expensive homes due to the huge tax increases they’d face once they purchased these homes. Now, they’d be able to take some of the “save our homes” tax savings they’ve accrued in their old homes with them once they purchase a new, larger home. Likewise, many “empty nesters” have been unwilling to downsize due to the possibility of paying higher taxes on a new home, even though it may be smaller. Now, they’re able to take the tax savings they’ve accrued with the “save our homes” initiative with them to the new, smaller homes they purchase.  Hopefully, this will provide a little boost to the slumping housing market in Florida.  A stronger housing market would resonate throughout Florida's economy.

The following information from the Florida Association of Realtors addresses the “portability” issue:

Portability – Moving up

Property tax savings portability (money saved over time on property taxes because of yearly increase limits through Florida’s Save Our Homes amendment) applies to homesteaders (homeowners with a homestead exemption) moving anywhere within Florida. Up to $500,000 of accumulated savings, applied to taxable value, may be transferred when one home is sold and another is purchased, with the transfer applying to all taxes, including the school portion. Homeowners have two years after they sell a home to buy a new one and transfer the savings.

If buying a more expensive home, a homesteader calculates savings by subtracting the assessed value (taxable value) from the just value (market value). The amount (savings over time) is then subtracted from the just value on the new home purchased. In most cases, the $50,000 homestead exemption will also be subtracted.

Example: Susie currently owns a home and has lived there for a long time. The house’s just value is $500,000, but because of Save Our Homes, the assessed value is only $200,000. Susie buys a new house for $700,000. The following year, she’ll pay taxes on only $400,000, however, because she’s “porting” $300,000 in value to her new home. After factoring in the new homestead exemption of $50,000, her total assessed value would be $350,000.

If buying a less-expensive home, the calculation changes and is based on the percentage of tax savings rather than a dollar amount. If the assessed value on the original home was 50 percent of the just value, for example, the homesteader would transfer that percentage to the new home, or have a new assessed value that is 50 percent of the new home’s just value. The percentage system was created to keep homesteaders from effectively eliminating their property taxes altogether by moving from a high-cost area of Florida to a low-cost area – a change that could severely hurt smaller rural economies.

Example: Susie currently owns a home and has lived there for a long time. The house’s just value is $500,000, but because of Save Our Homes, the assessed value is only $200,000. Susie buys a new town home for $300,000. She’ll pay taxes only on $120,000 because when buying down in value, she’ll keep the same ratio (40 percent) of assessed value to just value that she enjoyed in her old home. After factoring in the new homestead exemption of $50,000, her total assessed value would be $70,000.

Also, portability is retroactive to Jan. 1, 2007 – so everyone who bought this year and moved from an established homestead will be able to “port” their savings for next year. Since yearly tax values are based on ownership as of Jan. 1 each year, portability would not affect this year’s tax bills, which most homeowners have already received; but the savings will be applicable to next year’s tax bill.

I hope this information has helped you. Thanks for taking the time to read my blog and please call or email me if you need any real estate assistance.

Mark Trafton

850-322-9036

mark@marktrafton.com