Is Save Our Homes portability selling houses?

June 30, 2008
Author: Gary Pinnell Highlands Today, Sebring, Fla.

SEBRING, Fla. – June 30, 2008 – Raymond McIntyre’s office generated an interesting set of numbers this week: 222 people have moved to Highlands County, and brought their Save Our Homes tax exemptions with them.

Just 75 homeowners left the county, and applied to transfer their Save Our Homes elsewhere in Florida. Net gain: about three to one, said McIntyre, Highlands County’s property appraiser.

So, three real estate agents and brokers were asked, are people moving to Highlands County because they can buy a cheaper home, with lower taxes?

Save Our Homes explained

When people buy a home, they can apply for a $50,000 homestead exemption. If their home costs $100,000, the homestead exemption allows them to pay taxes on $50,000 instead.

There’s a second exemption, called Save Our Homes. If the market value of a house rises, for example, from $100,000 to $110,000 in a year, or to $200,000 in 10 years, the county tax assessor can raise the market value of the house by only 3 percent per year. So a house worth $100,000 in 1998 can have a maximum market value of only $134,000 in 2008.

That means the cumulative effect of Save Our Homes is enormous.

On Jan. 29, Florida voters approved Amendment 1, which allowed homeowners to transfer the Save Our Homes exemption when they bought a new home. Its feature, called portability, would help sell homes, real estate agents said. People had been living for years in homes that were too large or too small, and that big tax break would be the catalyst for trading places.

What Realtors say

Eileen Mikulecky is the broker at Keller Williams Realty in Sebring. She’s considering selling her house and buying a condo.

“I would never have considered it,” Mikulecky said. “Because the taxes on the condo would have been astronomical, if not for Save Our Homes.” But what about other buyers?

Steve Fruit whimsically calls his partnership at RE/MAX Realty Plus II with his wife, Janine, “Team Fruit.” He keeps statistics on every house marketed in Highlands County. As of June 15,461 were purchased, said Fruit.

“Most of the buyers I have dealt with – I’ve been educating them,” said Fruit, one of the 15 top real estate agents in the county. “A few seem to be conversant about Save Our Homes, but it’s amazing how many don’t know about it.”

Mikulecky agrees. “I’ve never had it said to me, ‘I’m buying or selling because of Save Our Homes.’ They do want to know, ‘What are the taxes?’ Then I explain portability. But the general public is not informed.”

So, the real estate agents think, the 222 home buyers who moved to Highlands County didn’t come here because they knew they would get a Save Our Homes tax break.

Should they be told?

A few months ago, a group of real estate agents approached Highlands County with an idea. Should they market Highlands County on the east and west coasts, where homes and taxes would be bargains – way cheaper than St. Petersburg, Tampa, Miami and Fort Lauderdale?

The disagreement then was who would pay for an expensive advertising campaign. The real estate agents wanted the county, the cities, the chambers of commerce and the economic development groups to foot the bill.

Whoever ends up paying, Fruit and Mikulecky still think it could bring homebuyers to Highlands County.

“I think it would be helpful,” said Fruit. “I think marketing would be very effective for those people who have not made decisions yet about where to go.”

“We have all these beautiful lakes,” said Jeri Canale, a real estate associate at Exit Realty All Stars in Sebring. “Now we have shopping. We have everything in Highlands County you need, including an Olive Garden.”

Even McIntyre doesn’t know exactly what to make of the statistics, because the homebuyers haven’t been questioned about why they moved here.

“I don’t know what features attracted them to Highlands County,” McIntyre said. “We don’t have a complete picture to look at. These are homesteads. We don’t know how many moved here, or moved out, who lived in rental homes, or bought second homes here and didn’t apply for homesteads. We don’t even know, at this point, where the majority came from. That may be interesting to the real estate agents.”