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Will The Super Exemption Knock Buyers Off The Fence?
September 18th, 2007 categories: Hillsborough Property Tax, Tampa Real Estate
Notable e-mail of the month:
Lenny,
I think I am going to call off the search for a house for a while. Until the taxes and insurance in this state get sorted out I think I am better off renting and placing my extra cash into savings/investments. Thank you for your time, I do appreciate the efforts you have put forward in trying to help me find a house. I just signed six month extension on my lease so I don’t expect to be looking again any time soon. Thanks again.
This from a client who was pre-approved, and was motivated to make a purchase. We discussed tax and insurance amounts, but he decided to put things on hold, even considering all of the advantages buyers now have. Will those same advantages be present 6 months down the road? Who knows. I do know this however; Six months from now, Floridians will have decided if they think the Super Tax Exemption is worth voting for. So if it does pass, let’s look at the implications to a home buyer.
Currently, if a buyer wants to purchase a $350,000 home as a primary residence, and homestead it, the property appraiser estimates taxes at from $6850 to $7611 once the assessment is reset and the homestead exemption kicks-in. Let’s use $7200 as our number. That’s $600 per month in taxes added to the mortgage payment. A big chunk of change.
Should the Super Exemption get at least 60% of the vote, a $350k home buyer would be looking at a taxable value of $177,500 after getting the exemptions (75% on the first $200k and 15% on the remaining $150k, and assuming an assessed value of $350k). That equates to a tax bill of about $4157 at our current millage rates. That’s about $347 per month added to the principal, interest, and insurance, or $253 less per month compared to the current situation.
That $253 is half a car payment, or 2 trips to the grocery store, or dinner (with some good wine) at Bern’s, airfare to somewhere, extra cash for savings/investments etc. A big chunk of change.
So the Super Exemption would be a start to putting a dent in a mortgage payment ( What is PITI?). But is that enough to knock some buyers off the fence? I would think so. And if Charlie can see that the insurance companies reduce rates, in response to House Bill 1A, that should help as well. But don’t hold your breath on that one.
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This is an interesting post… I’m featuring it on the Shak & Jill website that I contribute to!