Florida’s Property Tax Controversy Explained

Florida is at a crossroads, contemplating the elimination of property taxes, a proposal that stirs both hope and concern among residents. In this episode, we delve deeply into what this drastic change could entail, unraveling the complexities surrounding the potential $40 billion hole left in the state's budget. Our discussion highlights pressing questions surrounding the sustainability of essential services like schools, fire departments, and law enforcement without property tax revenue. 

Join us as we explore the possible ramifications of a steep rise in sales tax and budget cuts, both of which threaten to change the landscape of public services in Florida. What's more, we examine the effects such a change could have on the housing market—balancing the desires of current homeowners against the challenges faced by aspiring buyers and renters. 

Our conversation is not just an economic debate but dives into broader issues of equity, community impact, and long-term financial planning, making it relevant not only to Floridians but to audiences everywhere grappling with similar tax issues. As the conversation continues to unfold, we encourage you to engage, share your thoughts, and ponder the implications of these significant changes. Tune in, learn, and let’s keep the dialogue going!

📰 Read more about this topic in our latest article:  https://sunrisecapitalgroup.com/no-more-property-taxes-in-florida-the-bold-proposal-and-its-hidden-costs/

🔗 Check out our website for more information and valuable resources: https://linkin.bio/davidinvest

📸 Follow us on Instagram for updates and behind-the-scenes content: https://www.instagram.com/davidinvestai/

🔗 Network with me on LinkedIn for professional connections and advice: https://www.linkedin.com/in/vdavidenko/

📧 Subscribe to our newsletter for exclusive investment tips and insights: https://sunrisecapitalgroup.com/subscribe/

📚 Check out my course on Udemy - https://www.udemy.com/course/passive-real-estate-investing/

Disclaimer: The content provided on this channel is intended for educational and informational purposes only and does not constitute investment, financial, or tax advice. We strongly recommend that you consult with qualified professionals before making any financial decisions. Past performance of investments is not indicative of future results. The information presented here is not a solicitation or offer to buy or sell any securities or investments. Our firm may have conflicts of interest, and we do not guarantee the accuracy or timeliness of the content provided. Investing involves risks, and you should carefully consid...

Chapters

• 0:50 Introduction to Florida Property Taxes
• 14:55 The Consequences of Eliminating Property Taxes
• 28:25 Exploring Alternatives and Public Services

Transcript

Speaker 1: 0:25

All right, so are you ready to dive into this whole no property tax thing going on in Florida?

Speaker 2: 0:31

Oh yeah, this is a. It's a big one.

Speaker 1: 0:34

It is. It is and, like with most things, I feel like the more you learn about it, the more complicated it gets. Right. We're going to be looking at an excerpt from Florida property tax elimination Costs and consequences. Costs and consequences.

Speaker 2: 0:57

And I guess our sort of mission here is to figure out, like what this proposal could actually mean, you know, for people. Yeah, it really could reshape how the state funds, like everything.

Speaker 1: 1:01

Yeah, yeah, like I'm talking schools, roads, like all the things that we just kind of expect.

Speaker 2: 1:06

Like police, fire departments, all of it.

Speaker 1: 1:08

Yeah. So before we even get into like the what, ifs and the maybes, let's just take a minute and talk about like what's going on with property taxes in Florida right now.

Speaker 2: 1:14

Well, right now they're how the state pays for most of those services, but they've been going up.

Speaker 1: 1:19

Steadily climbing.

Speaker 2: 1:20

Yeah.

Speaker 1: 1:20

And you know I was looking at this report and they were talking about Broward and Miami-Dade. Yeah, and since 2019 in Broward the median property tax rate has gone up by 57 percent and Miami-Dade's not that far behind. It's like 50 percent.

Speaker 2: 1:35

Yeah, I can definitely see why getting rid of property taxes completely sounds like a good idea to a lot of people.

Speaker 1: 1:40

Right, especially, like for you know, people on fixed incomes.

Speaker 2: 1:43

Exactly, especially retirees.

Speaker 1: 1:45

Retirees. Yeah OK, so let's say hypothetically that those taxes just disappear. Yeah OK, so let's say hypothetically that those taxes just disappear, poof. Ok. Where does that $40 billion go?

Speaker 2: 1:54

It's got to come from somewhere.

Speaker 1: 1:55

Right, it's got to come from somewhere. So the report talks about two main alternatives sales tax or budget cuts. Right, let's start with that first one Sales tax. So to make up for all that lost revenue, florida might have to double its sales tax To 12%. 12%, that's like the highest in the entire country. Yeah it would be Think about that Every time you buy something, boom 12%.

Speaker 2: 2:18

Yeah.

Speaker 1: 2:19

So maybe sales tax is off the table. Maybe, but then you know we've got this whole budget cuts thing. What could that actually look like in people's everyday lives?

Speaker 2: 2:36

Well, I mean think about it.

Speaker 1: 2:37

Fewer teachers. Fewer police officers. Fewer firefighters. Fewer firefighters yeah, longer wait times, if you need to call 911.

Speaker 2: 2:40

Your kids are in like gigantic classes, right, and if you need a road repaired, forget about it. It could take forever.

Speaker 1: 2:44

Wow, it really makes you think. Okay, so let's step back for a second and talk about how Florida's taxes are kind of unique. To begin with. Right, most states have a state income tax. Right, florida doesn't. Nope, big deal.

Speaker 2: 2:55

Big deal yeah.

Speaker 1: 2:56

So so the report compares Florida to Texas and New Hampshire. So Texas also doesn't have a state income tax Right, but they make up for it with higher property taxes.

Speaker 2: 3:06

Exactly.

Speaker 1: 3:07

And then New Hampshire has like a really tiny sales tax.

Speaker 2: 3:11

Yeah.

Speaker 1: 3:11

But they also have higher property taxes.

Speaker 2: 3:13

Right.

Speaker 1: 3:13

So Florida is kind of in like uncharted territory here. Yeah, I mean they're trying to find a way to pay for everything without relying on income tax or our property taxes.

Speaker 2: 3:23

Yeah, it's a pretty unusual situation.

Speaker 1: 3:25

It seems like a very risky kind of move, especially I don't know if they don't really have a plan for for, like, making up that lost money Right. I mean, I guess like the basic thought is that it would bring in more people to live there, more businesses.

Speaker 2: 3:41

Yeah.

Speaker 1: 3:42

Because there are no property taxes.

Speaker 2: 3:43

Right.

Speaker 1: 3:44

Right, right, but but I'm curious, like what could this do to the economy there in the long run?

Speaker 2: 3:50

Like really, Well, one thing to think about is what could happen to home values if property taxes just vanished.

Speaker 1: 3:58

Okay, yeah.

Speaker 2: 3:59

Demand for homes in Florida could go way up.

Speaker 1: 4:01

Oh yeah.

Speaker 2: 4:02

And that could make prices you know, even higher than they already are.

Speaker 1: 4:06

Wow. So it's like this double-edged sword, right, like, on the one hand, if you already own a home, that sounds amazing, right, but if you're trying to buy your first house or you're renting and trying to just like afford to live there, yeah, yikes, it's not going to be easy. Right, right. So it's not just about attracting new people, it's about what happens to the people who already live there.

Speaker 2: 4:26

Exactly.

Speaker 1: 4:26

And how this could really change their lives.

Speaker 2: 4:28

And it could also affect Florida's bond rating.

Speaker 1: 4:30

Long ratings.

Speaker 2: 4:31

Yeah, you know those credit rating agencies.

Speaker 1: 4:33

Oh, right right.

Speaker 2: 4:34

The ones who decide how risky it is to lend money to the state. They might see this as a big risk.

Speaker 1: 4:44

Oh, I see, and that could make interest rates go up on any loans Florida needs to take out, so in the long run taxpayers could end up seeing more.

Speaker 2: 4:48

It's definitely possible.

Speaker 1: 4:49

Okay, so there are these big like financial ripple effects, and it's not just homeowners, it's not just businesses, it's like everyone.

Speaker 2: 4:58

It's a chain reaction.

Speaker 1: 4:59

A chain reaction. With a lot of unknowns, a lot of unknowns, and you have to think about the psychology of it too. What do you mean? Well, think about it from the perspective of businesses thinking about investing in Florida? Sure, if they sense that things are unstable.

Speaker 2: 5:13

Yeah.

Speaker 1: 5:14

Or they're not sure about the state's financial future. Yeah, they might hesitate.

Speaker 2: 5:18

Makes sense.

Speaker 1: 5:19

It's not just about the numbers, it's about confidence, right, and this kind of big change could make people nervous.

Speaker 2: 5:25

Inside and outside Florida.

Speaker 1: 5:26

Inside and outside Florida. It's about believing in the whole system. That's a good point. And this report also talks about how important property taxes are for funding, like all those essential services in local communities. So, like what would happen if that money just suddenly dried up Could be pretty bad. Right, like schools might not be able to stay open. Right, police and fire departments could be stretched way too thin.

Speaker 2: 5:51

And infrastructure projects could be put on hold indefinitely.

Speaker 1: 5:55

Wow, it's kind of like a domino effect, it is. You know, one thing falls and then the whole thing starts to unravel. It's a little scary when you think about it, honestly.

Speaker 2: 6:04

It is, and it raises questions about fairness too.

Speaker 1: 6:07

Oh yeah, Good point.

Speaker 2: 6:07

Like would this really benefit wealthier homeowners more?

Speaker 1: 6:11

While putting essential services at risk for everyone.

Speaker 2: 6:14

Right and would it create even bigger differences between different communities?

Speaker 1: 6:18

That's a really good question. It seems like there's just a lot of potential downsides here, right? I mean, maybe at first glance this proposal sounds good.

Speaker 2: 6:28

Yeah.

Speaker 1: 6:28

But when you really start digging into it, a whole lot of complications. Yeah, it's like opening Pandora's box. Yeah, like, what do you see is the biggest potential pitfall of this whole thing?

Speaker 2: 6:37

I think for me it's the lack of a clear plan for how to replace the lost revenue.

Speaker 1: 6:43

Yeah.

Speaker 2: 6:43

The report talks about raising sales taxes or making budget cuts. Right, but both of those have big problems.

Speaker 1: 6:51

Yeah, it's like pick your poison.

Speaker 2: 6:53

Right. Do you want higher taxes or fewer services?

Speaker 1: 6:56

Right and nobody really wants either of those.

Speaker 2: 6:59

Right.

Speaker 1: 6:59

So it's like this no-win situation it is. It really is.

Speaker 2: 7:03

It just really shows you. You know they need a better plan before they make a big change like this. You can't just get rid of the money and not know where it's going to come from right.

Speaker 1: 7:14

Yeah, it's like jumping out of a plane and hoping you figure out how to use a parachute on the way down. There's got to be a better way.

Speaker 2: 7:20

Right. So, like, instead of arguing about whether to get rid of property taxes, maybe we should be talking about, like, what comes next?

Speaker 1: 7:26

Yeah, ok, so what are the options then?

Speaker 2: 7:29

Well, I mean, maybe, instead of getting rid of property taxes completely, you could like change how they work. You know, like maybe offer some exemptions or find other ways to get money that are more stable more stable and fair Right.

Speaker 1: 7:41

So I mean this is kind of a big question, but do you think Florida is actually going to do this, like actually get rid of property taxes?

Speaker 2: 7:51

This whole thing has definitely started a big conversation about taxes in Florida. People are having to really think about you know what are the tradeoffs, what are the long term consequences.

Speaker 1: 8:04

What are the solutions? Right, ok, so like if you were a Florida resident, what would be your biggest concern about all this?

Speaker 2: 8:12

Honestly, I would want to know exactly how they're going to replace the lost money. Yeah, show me the plan.

Speaker 1: 8:19

Right.

Speaker 2: 8:19

What's the economic impact going to be?

Speaker 1: 8:21

Like not just next year, but in five years, 10 years.

Speaker 2: 8:24

Exactly and how are they going to protect those essential services we were talking about?

Speaker 1: 8:28

Yeah, Don't just tell me it'll be fine. Like I want to see the numbers.

Speaker 2: 8:31

Right, exactly, I want to see a real plan with real numbers, based on evidence.

Speaker 1: 8:36

So it's not just about the now, it's about the future too.

Speaker 2: 8:39

And you know, it's not just Florida that's watching this whole thing unfold. Oh, that's true, other states are paying attention too.

Speaker 1: 8:44

Yeah, because if Florida can get away with this other states might try it too. Exactly.

Speaker 2: 8:49

But on the other hand, if it doesn't work out, it's like a warning sign for everyone else. Exactly.

Speaker 1: 8:55

It's like this giant experiment and everyone's waiting to see the results.

Speaker 2: 8:59

Right and it shows you how everything's connected.

Speaker 1: 9:02

Oh yeah.

Speaker 2: 9:03

Taxes the economy, social services, even politics.

Speaker 1: 9:07

It's all tied together, which is why I think it's so important to have these conversations.

Speaker 2: 9:10

Absolutely.

Speaker 1: 9:11

You know, it's so easy to think of this stuff as just like something that happens in the news or whatever. Right, but it affects real people.

Speaker 2: 9:17

It does, and that's why we have to talk about it. Ask the tough questions, make our leaders be honest about what's going on.

Speaker 1: 9:25

I couldn't agree more. We've got to stay informed, stay involved, yep, make our voices heard. And you know, honestly, sometimes just understanding the issues is the first step.

Speaker 2: 9:37

That's so true. Like they say, knowledge is power.

Speaker 1: 9:40

Yeah, and hopefully this deep dive has given our listener a little bit more power to like understand this whole thing.

Speaker 2: 9:45

I hope so. This has been a great conversation. It's always good to really break down these complex issues.

Speaker 1: 9:50

I agree. It's like peeling back the layers of an onion.

Speaker 2: 9:53

I like that.

Speaker 1: 9:54

Sometimes it makes you cry, but it's worth it in the end. So, speaking of getting to the heart of the matter, I think it's time to wrap up this deep dive with one final question for our listeners.

Speaker 2: 10:06

Ooh, I love a good cliffhanger. Let's hear it.

Speaker 1: 10:09

Lay it on us.

Speaker 2: 10:10

All right. So imagine Florida gets rid of property taxes. Okay, what would you do to replace that lost revenue?

Speaker 1: 10:19

Ooh, that's a good one.

Speaker 2: 10:20

And what would be your criteria for deciding if it's a good idea or not?

Speaker 1: 10:24

That's putting the listener right in the hot seat.

Speaker 2: 10:26

Yeah.

Speaker 1: 10:26

No easy answers here, folks.

Speaker 2: 10:28

Nope, but plenty to think about.

Speaker 1: 10:30

Plenty to think about and you know that's what we're all about with these deep dives. We want to spark your curiosity, you know, get you thinking critically.

Speaker 2: 10:37

Happy form your own opinions.

Speaker 1: 10:39

Exactly so. Listener, we want to hear from you. What are your thoughts?

Speaker 2: 10:44

Share your ideas, your worries, your solutions. Hop on social media, talk to your friends. Let's keep this conversation going.

Speaker 1: 10:52

Yeah, the more we talk about these things, the better we'll all be at dealing with whatever comes next.

Speaker 2: 10:56

Absolutely. Yeah, it's a great point. It's not like we're talking about some far off theoretical thing. You know, this is real life stuff.

Speaker 1: 11:03

It is and it affects real people. You know what I mean. It's not just numbers on a page.

Speaker 2: 11:07

Exactly, and it's why we need to be talking about these things, we need to be asking those tough questions, like you said, and we need to make sure our leaders are being transparent with us about you know what's really going on.

Speaker 1: 11:18

I completely agree with you there. You know we all have to stay informed and stay involved.

Speaker 2: 11:23

Yeah.

Speaker 1: 11:23

We have to make our voices heard, but I think sometimes, honestly, just understanding the issues better is like the first step.

Speaker 2: 11:32

That's so true Knowledge is power, like they say.

Speaker 1: 11:35

Exactly and hopefully you know, this deep dive has given our listeners a little bit more of that power to understand this whole situation a bit better.

Speaker 2: 11:43

I hope so. It's been a really interesting conversation. I always like digging into these really complex topics.

Speaker 1: 11:49

I do. It's like peeling back the layers of an onion right.

Speaker 2: 11:51

Yeah, like that.

Speaker 1: 11:52

Sometimes it makes you cry a little bit, but it's worth it. To get to. You know the core of what's going on.

Speaker 2: 11:58

Totally agree and I think, speaking of getting to the core of it all, it's time to wrap up this deep dive, but you know I always like to leave our listeners with a little something to think about. Yeah, I could have that cliffhanger Right, exactly so here it is. Imagine Florida goes ahead with this right they eliminate property taxes. What would you propose to replace that lost revenue?

Speaker 1: 12:22

Ooh, that's a good one.

Speaker 2: 12:23

Yeah, and what would your criteria be for deciding if your idea is a good one or not?

Speaker 1: 12:28

Wow, that's a tough question, no easy answers there.

Speaker 2: 12:31

Nope, but definitely a lot to think about.

Speaker 1: 12:34

A lot to think about, and you know, that's what these deep dives are really all about Getting people curious, getting people thinking critically.

Speaker 2: 12:41

Helping you farm your own opinions.

Speaker 1: 12:43

Exactly so. Listener, we want to hear from you. What are you thinking, what are your ideas?

Speaker 2: 12:49

Share your concerns, your solutions, you know. Talk about it on social media, discuss it with your friends. Keep this conversation going.

Speaker 1: 12:57

Yeah, the more we all talk about this stuff, the better prepared we'll be for, you know, whatever comes next.

Speaker 2: 13:03

I totally agree.

Speaker 1: 13:04

Well, on that note, I think we're going to wrap up this deep dive into Florida's property tax situation. Thank you so much for joining us and until next time, keep diving deep.