Florida Homes and Properties

When homes go into foreclosure, the owners are often far more worried about the mortgage payment than anything else. There are numerous costs involved with owning a house, though, and all of these need to be paid before and during the foreclosure. If they are not paid, and the homeowners are able to stop foreclosure before losing the home, they can quickly find themselves back in the same situation, in danger of being sued again for delinquent property taxes, homeowners association fees, or find themselves owning an uninsured home. Even worse, the lender may impose an escrow account or forced insurance on the property. Thus, it is important for foreclosure victims to keep on top of as many of the payments relating to the house as they can.

The county and city property taxes work slightly differently from the other charges mentioned above, due to their higher priority in the foreclosure proceedings, but they, along with any other liens on the property, will be wiped off after the sheriff sale of the house. When the sheriff sale is conducted, the house will be sold for whatever the highest bid amount is. These proceeds will be used to pay off everything that is affecting the house. First to be paid is any delinquent or currently due property taxes. The county gets paid first if the homeowners do not postpone the sheriff sale or work out a solution to prevent foreclosure.

If the foreclosure victims can not save their house, there may be a possibility of delinquent taxes being added as a lien on the property before the foreclosure. The lender will try to prevent this, as they will want as much of their money as possible without a tax lien, which will include the costs for obtaining the lien, as well as the taxes themselves. However, this possibility depends on how the property tax is being paid, whether through escrow with the mortgage company, or if the homeowners are paying it on their own.

If property taxes are paid through the escrow account, then the lender will pay the property taxes as they come due. Of course, the amounts paid for taxes will be added to the total payoff needed to sell the house or refinance to stop foreclosure, but the taxes will be paid to the county on time. The bank will not let the house go into a property tax foreclosure while they are pursuing their own foreclosure, and this gives them the opportunity to add more interest and charges to the total payoff, as they can stack up more junk fees on a negative escrow balance.

If the homeowners are paying the taxes on their own, though, and they get behind, then the proceeds from the sheriff sale will be used to pay off the property taxes. When the sheriff sale is conducted, the sale price will be used to pay the taxes first, then the mortgage, then any second mortgage and other liens. But the property taxes will be paid, in order to prevent the county from taking possession of the house. The possibility of the county obtaining a lien on the house may be small, but it is usually enough for the bank to impose an escrow account on the homeowners. They simply pay the delinquent taxes and add that amount to the total payoff, along with related charges and interest, which drives up the amount needed to reinstate the loan or avoid foreclosure completely. The homeowners may not even know they are now paying extra every month to keep up a new escrow balance, until they have saved the home and are now making regular payments again — it is just that the payments may be much higher than they originally were due to the imposed escrow payment.

After the property taxes are paid off through the sheriff sale, the first mortgage will be paid off with as much of the proceeds as are left. If there is not enough to pay the first mortgage completely, then the Homeowners Association (HOA) and other lienholders will simply get nothing.

Now, the HOA could try to sue the homeowners after the foreclosure for the amount of fees that were owed up to the date that they were no longer the owner of the house. It may not be worth the time or effort for them to try to sue and obtain a judgment, though, especially as it is commonly known that most foreclosure victims do not have the extra resources to pay a deficiency judgment and little motivation to work out a payment plan or other arrangements. It is more likely the HOA will simply give up on collecting the fees, as they will not be able to cover the costs of the lawsuit.

Hazard insurance, the last of the costs most commonly associated with the mortgage payment, is usually paid with the mortgage in the escrow or monthly payment. If that is not being paid, or the owners are responsible for paying the insurance on their own, there will be no lien placed on the property for it; the house simply does not have hazard insurance. If anything happens to the house while the insurance is not paid, the insurance will not cover it, obviously. This is another charge that the bank can impose on the property, if they know that the foreclosure victims are not taking care of it. Mortgage companies certainly do not want to loan money on a house that, if it is destroyed, will be a complete loss to them; insurance is most often mandatory for obtaining a loan in the first place.

The longer the foreclosure goes on, the higher costs will climb and the more difficult it will be for homeowners to solve the crisis and prevent foreclosure. Various expenses will still have to be kept on time, including the property taxes, homeowners association fees, and hazard insurance, or else the danger of future foreclosures will be present, or the lender may impose a forced, expensive escrow account to make sure they are paid. Extra liens may be placed on the title, and the homeowners may be sued after foreclosure or find that their insurance has lapsed and will not cover any damages that occur to the property. Thus, homeowners may find that they are fighting foreclosure on numerous fronts at once, but they need to be aware of all of the possibilities of letting their housing payments go into default. Foreclosure is obviously the most pressing concern, but it may be all the little charges that cause them to lose their homes, unless they gain enough foreclosure information to understand the entire process and what is truly at stake.

Florida Investment Property – Why Investing is a Wise Decision
There are many reasons to purchase investment property in Florida, the foremost being value appreciation. Property values generally rise while debt decreases; making real estate purchases a good investment. Every year since 1968, the national median home price has risen. Usually, home values increase at around the rate of inflation, with a greater increase possible. In recent years, median prices have increased by as much as 9 percent, making purchasing investment property in Florida a wise long term investment. Building equity is an excellent reason to purchase investment property in Florida. Equity grows over time for owners while renters don’t see any return on their money. Purchasing property forces you to save, making you a wise investor without realizing it. Owning investment property in one Florida location may make it possible for you to expand, purchasing a second and third property as rental profits increase. Owning investment property in Florida gives you borrowing power, the ability to use your property equity to borrow funds for your own use, or for further investment. Owning investment property in Florida gives you a sense of stability, not only for the consistent rental income, but for the potential of it becoming a regular seasonal vacation home for your family. Imagine the pleasure and ease of knowing where you are going to vacation, there’s no need to decide on location and try to compete to make reservations, with prices changing every year. There is stability on owning an investment property in Florida that can also be used as a family vacation resort.

Why the Interest in Florida Investment Property?

Considering the myriad of investment property locations on the market, Florida investment property is one of the most desirable. Home to 11 of the country’s 100 fastest-growing counties, a Florida investment property has high potential as a profit-maker, unlike most other areas. Port St. Lucie, Miramar and Cape Coral are the fastest growing cities in Florida. It’s unlikely you will make a mistake investing in Florida real estate considering the vast number of tourists and new residents flocking to the land of sun and surf. The most difficult decision to make will be which location in Florida to purchase. Good investments abound in each area of the state, from Miami in the south to Clearwater on the gulf coast, going east to Daytona Beach and north to the panhandle. Selecting a location depends on your goals for purchasing Florida investment property. Carefully consider what you intend to do with your Florida investment property. Will your purchase be used mainly as a rental property for vacationers? Do you intend to have access to the property during certain seasons? Or is your goal rental of the property to local tenants? Some of these questions will help you in narrowing down your search. Once you have determined whether your Florida investment property will be used primarily for vacationers or for local renters, and whether you intend on using it as a vacation resort yourself, it is easier to choose the location.

Florida Investment Property Locations

There are so many location options of investment property in Florida, making it difficult to select just the right location. Let’s start from the top! Do you desire a beachfront location, or one close to the coast, or would you rather select property in a town setting. Tourist area or settled community, inland or beachside? Asking these questions helps you narrow down your search. Each area where an investment property in Florida is located has its own flavor, its own attractions. Let’s start with the Miami area. Miami is located in the southeastern corner of Florida and Miami Beach is a seven mile long island known as America’s Riviera. Home appreciation rate in the Miami area is about 11% with the median home price around $240,000. There are diverse offerings of single family homes, ocean front property and ocean view condominiums. Of course condo and home prices are offered in a vast range, with upscale areas bringing in up to $5 million. Condos and town homes may be cheaper, depending on location, but with price escalation and population density, even there it may be hard to find a bargain. Miami offers beautiful beaches with perennial sunshine but traffic congestion and the increasing population boom may be a deterrent to some. Just forty miles north of Miami, lies Boca Raton with five miles of coastline and gorgeous beaches. Appreciation rate here is around 11%. Clearwater, on the west coast of Florida borders Clearwater Harbor and the Gulf of Mexico. Indian Shores is a small historic community offering condos, gulf front property and Intracoastal Waterway homes and town homes. The appreciation rate for investment property in Florida, Clearwater is about 9%.

Investment Property in Florida – Daytona Beach, Jacksonville and Destin
Moving north in our search for investment property in Florida, let’s take a look at the Daytona Beach area. Daytona is known as a spring break and family playground on Florida’s east coast about 50 miles northeast of Orlando. Homes prices are surprisingly reasonable here in comparison with other popular Florida beach locations. Appreciation is about 10% with homes starting as low as $80,000. A large variety of housing choices exist, everything from inland or waterfront property, to townhouses and single family homes, ocean front or inland. Older homes abound but there are also several new upscale building projects. Let’s take a look further north at Jacksonville. Jacksonville is known as Florida’s River City due to the ever-present St. John’s River which flows through the city, ponds and lakes. A modestly priced investment property in Florida can be found here with a range from $60,000 to several million. Appreciation is around 9% with continual growing home construction. Unique to Jacksonville is its diverse neighborhoods and building styles. Destin is located in the Emerald Coast of Florida, sitting on the Gulf of Mexico. It is just south of Alabama and was recently voted as having the best beaches in the US. Destin boasts great seafood, and excellent golfing and fishing. Home appreciation here is around 12% with the median home price about $165,000. Condos and townhouses here begin at $100,000 and can go upwards in the millions for waterfront property.

Investment Property in Florida – Attractive Tourist Areas

Let’s play a little word association. I’ll say Florida and chances are the majority of people will say Walt Disney World, or something relating to the Orlando area. Orlando has a thriving tourist economy that attracts close to thirty five million visitors each year. Real estate is booming here with the median price taking a dramatic jump from $166,000 to $200,000, an appreciation of 27%, making investing near Orlando a great venture. Conway Belle Isle, east Orange County, Maitland/Winter Park and northwest Orange County have seen the most dramatic property value increases. There is a strong job market here without forecasts of a downturn, keeping prices strong. There are a large variety of properties to choose from, including starter homes, modest cottages, older homes and impressive new developments. Orlando is called the City Beautiful and owes part of that title to its cleanliness, newness and innovation and variety of lakes and nearby attractions. Whether you are considering investment property in Florida as a rental for locals, as a tourist rental or to rent and use yourself, Orlando is an excellent choice in location. Consider the varied options of attractions in the Orlando area. Walt Disney World would be foremost as a draw card, followed by Sea World, and Universal Studios. But along with these well-known attractions, a plethora of other hot spots exist. Wet-N-Wild draws a huge number of the sizzling summer crowd, a great place to cool down on a scorching Florida summer day. Kennedy Space Center makes a great day trip as well as Cocoa Beach, home of Ron Jon’s Surf Shop and Daytona Beach, a world famous family and spring break destination.

Investment Property in Florida – Locations near Disney World

Having established that owning investment property near Orlando would be a wise investment decision, the search now begins for a specific location. Disney World, Sea World and Universal Studios are located on the south side of Orlando. Condos, town homes and single family homes are commonly purchased for investment purchase in this area. Closest to the Disney area is the community of Kissimmee, Florida. Kissimmee was a sleepy cow town just a decade ago. It is now booming with tourist activity. A quaint downtown area still exists with a few cattle ranches on the outskirts but generally the flavor of Kissimmee now reflects its large tourist population. Close to Disney, within 30 to 45 minutes, lies the lesser-known town of Davenport, Florida. Surrounded by orange groves, it gives you the feel of old rural Florida, but is close enough to the major attractions to make this an attractive investment option. Looking to get into a ground floor investment opportunity? Bimimi Bay Resort, a brand new town home resort development is now offering purchase opportunities. The many amenities in the planning stages include a resort pool, 2 movie theatres, a major restaurant chain, club house, lazy river, food court and many others. For the price of principal, interest, taxes and insurance, the owner has the many advantages of using the property for a minimum rate while vacationing and letting Bimimi Bay take care of all the headaches of rental during the year, still receiving a reliable monthly income. It’s a no lose deal for investors.

In 2007 the number of home foreclosures aspired to almost 300,000 that was an increase of close to 300% compared to the number of foreclosures in 2006. People have had to pack up and sell whatever the can and move on. Now do you think that the banks want sit on all of these empty houses? Empty houses mean more expenses? This means that these foreclosed properties are going to be on the market and that there will be substantial savings for buyers that want a great deal!

Lenders and banks don’t like sitting on empty houses. These don’t produce money and they require a lot of maintenance. This means that there are lots of opportunities in the Florida real estate market and these are sold at great savings for buyers. This is a great opportunity for people that want to find investment property.

Actually there is a lot of property in Florida that can be picked up for a bargain! There is all kinds of property available for you to choose form, commercial real estate, land, homes, etc.

Fist let’s discuss what a foreclosure is, that way you can better understand why there is so much property for sale in Florida, and why its not a scam. When someone buys a home, they usually get financing from a bank or a lending institution. They then begin to make monthly payments. When you buy a home and get a fixed interest rate, then you pay the same amount month in and month out throughout the term of the loan. But there are many loans that are not fixed interest, but are variable interest rates. This means that you may start out paying small monthly payments, but as time goes on the payments will start increasing.

Many people got into these types of loans expecting the economy to continue to grow, and interest rates to remain low. And this did not happen. Now, they are left with very expensive monthly payments and no way to cover those monthly payments.

They have no other option except to declare bankruptcy. The lender has no other choice, but to confiscate the property, but this lender doesn’t want to be saddled with the property. A property takes maintenance and that means more money out of pocket for the lender.

The lender needs to sell the property off quickly and will sell it directly or through an auction, which means that they will usually sell a property off at a discount and this discount can even be up to 20% off.

This leaves you with a great number of opportunities available in Florida. And this why there are so many houses and properties at such great prices, and why it is a good idea to invest in these as an investment or just as a great deal on a home.

If you are paying taxes, it means you are making money. If you are paying a lot of taxes, then it stands to reason that you are making a lot of money. However much you make, it doesn’t make it any less painful to pass it along to the government though. Unfortunately I haven’t been faced with the problem of paying a big bundle of tax to the government (but I am hoping I have that problem really soon!!), but I have been through enough in the last seven years to give you a few pointers on some ways to minimize taxes surrounding the sale of your real estate investments.

As a real estate investor, you will pay tax on the rental income you earn on the property as well as on any capital gains when you sell. The amount of tax you pay on rental income can be reduced dramatically by expenses such as maintenance, property management, capital cost allowance (depreciation), interest on your mortgage (but not the principal pay down), and other money spent to run your property. In Part 2 of this article series, we’ll address some of these write offs. For this edition, let’s focus in on the second major area you will pay tax on, and that is on Capital Gains when you sell your investment.

A Capital Gain occurs when you sell your property for more than you paid for it. You do not realize your capital gains until you sell.

To calculate your capital gain take the:

Money from the sale of your property

SUBTRACT

Costs of disposition (real estate agent fees, lawyers etc.)

SUBTRACT

What you paid for the property.

You will owe tax on 50% of the amount from the above calculation if the resulting number is positive (a capital gain). This amount gets added (or subtracted if it’s a net loss) to your personal income and you are taxed accordingly.

If the property you are selling is your principal residence, then it is exempt from tax. According to Canada Revenue Agency, a property qualifies as your principal residence if in that year of filing:

* you acquire only to get the right to inhabit

* you own the property alone or jointly with another person

* you, your current or former spouse or common-law partner, or any of your children lived in it at some time during the year

* and, you designate the property as your principal residence.

Now, what if you live in the home for a few years, and then move out and rent it out for a few years as I did with the condo that I owned in Toronto? In that situation, the answer for me was that the condo could still be considered my principal residence for four years after I changed it’s use. The catch is that I could not claim capital cost allowance on the condo, nor could I claim any other property as my principal residence at the same time. For me, this choice was easy because I moved into a property Dave and I already owned and had been treating as a rental property from the accounting sense of things. It was easier to keep the condo as my primary residence and continue to treat my new “home” as a rental property for accounting purposes. It’s important to note that you and your significant other (including common law or same sex partner) cannot own two principal residences at the same time for tax purposes. You must choose one during the over-lapping period.

It’s complicated and that is why both my husband Dave and I have accountants that we consult with on a regular basis to get the best advice.

On January 29, 2008, a constitutional amendment was approved by Florida voters.

Our opinion on this tax reform is not very positive, even though we estimate that it could give a small “shot in the arm” to the depressed Florida real estate. Additional and more substantial reforms must be considered by the legislature if we want our whole tax system to be more equitable and fair, and alleviate the problems of our vanishing middle class.

Some important changed substantially the structure of the homestead and “save-our-home” exemptions. Here is where we stand now:

Homestead exemption. For Florida residents who have filed for this exemption.

- $ 25,000 basic exemption

- Additional $ 25,000 for all homes assessed at $ 75,000 or more. This additional exemption does not apply on the school portion of the tax bill. (about 36%)

- Additional $ 25,000 Senior Citizen exemption. Must be at least 65 years old, and their total household income does not exceed $ 24,214 (amount yearly adjusted for inflation)

This exemption must be renewed annually, including IRS tax return or proof of non-filing.

- Additional $ 500 Widow/widower exemption. Not eligible if remarried.

- Additional $ 500 Disability/Blindness exemption.

- Additional $ 5,000 Veteran Disability exemption. Higher if combat disabled veteran.

- Full Exemption for Veteran service-connected total and permanent disability.

- Full Exemption for totally and permanently disabled persons. Subject to yearly income not exceeding $ 23,604 (adjustable for inflation)

- “Grammy Flat” exemption. When building additions to provide living quarters for parents or grandparents, exemption for the amount of the new construction, up to 20% of the homestead value.

Business Equipment Exemption – $ 25,000. Currently all businesses are subject to an annual tax on tangible property. Small businesses with less than $ 25,000 in tangible property, are not required to file anymore tangible property tax returns.

Save-our-homes

This amendment, approved in 1992 limits the increase of assessed values of homesteaded homes to 3% per year.

Portability of Save-our-homes.

Homesteaded owners can move this benefit from one homesteaded home to another, up to $ 500,000. To be eligible, the new property should be purchased within two years of abandoning the Homestead of the previous home. This portability can be used an unlimited amount of times. One way to calculate this is to calculate 85% of the new home purchase price, then divide that number by the 2007 “just value” of your current home. Multiply that amount by your present “save-our-homes value and the final result will be your estimated new Save our Home value. (this is only an approximate calculation). Another way to explain is: The difference between the “just value” of your home and the “save-our-home” assessed value can be transferred as a reduction to your new home assessed value, up to $ 500,000. We anticipate some confusion to be clarified by Florida Department of Revenue advisory opinions.

All other properties that do not have the homestead protection, such as commercial real estate, rental properties, second homes, investment properties have a new protection. Their taxable value cannot increase more than 10% per year. This cap does not apply to the school portion of the tax bill.

To secure yourself a Florida property for ?80,000, you’ll need a cool head and the patience of a saint. Many Florida property agents are currently displaying surprisingly attractive properties at super-low prices that positively scream value for money to those of us getting excited about the two-for-one exchange rate.

Unfortunately, there are a couple of drawbacks. Firstly, in many cases, the agents in question have absolutely no intention of selling you a Florida property for as little as ?80,000; they merely wish to introduce themselves to you before heading you in the direction of more lucrative Florida property options. The second is that the two-for-one exchange rate is currently slipping away; at the time of writing, the greenback is back with a vengeance, trading at around 1.83 against sterling. There’s still a long way to go before the dollar gets back to pre-credit-crunch levels, but it’s definitely heading in the wrong direction for buyers.

But just look at what comes with a Florida property: the delights of year-round sunshine; vast expanses of beautiful coastline; the world’s greatest theme and leisure parks (Walt Disney World, Universal Studios, SeaWorld, Discovery Cove, and Epcot, to name but a few). And we haven’t even started on the golf courses.

But is the tide for Florida property now turning? Have Florida property prices now fallen low enough for us to consider taking the plunge? That’s difficult to gauge in a market that’s going through such unusually dramatic turmoil. The trouble is, while the bottom has famously fallen out of the market, the top remains in denial, pedalling furiously in mid-air like Wile E. Coyote. Whether or not the coyote will miraculously run right across the chasm this time and continue on its merry way, only time will tell, but Florida property at a less rarefied level has certainly taken a huge nosedive.

Lee Weaver of The British Homes Group, which specialises in providing a one-stop shop service for Brits searching for Florida property, says: “In all our 30 years helping UK buyers find Florida property, the market has never been so full of bargains. For example, Countrywide Financial Corporation, the US’s number one home lender, is currently marketing over 1,600 Florida homes with some houses listed at 40 per cent less than their market value two years ago.”

With this in mind, Homes Overseas has done some sleuthing and come up with Florida property on the market for less than the price of a new Jaguar.

Orlando, in central Florida, is far and away the most important destination for British buyers, who are lured by its unbeatable combination of family fun, top-quality golf courses and historically reliable rental returns. It is, in fact, the world’s biggest tourist destination, with more than 50 million visitors a year; yet surprisingly has been hit harder than most areas in Florida by the credit crunch. For example, a studio apartment is currently offered by Feltrim at Horizons at the Grenelefe golf resort. This attractive and substantial development boasts three golf courses (one of them Arnold Palmer-designed), as well as a huge water park, a marina, spa, sports and fitness facilities, bars, shops and restaurants. The apartment is newly-refurbished and is now on the market for just $80,000 (?43,500).

In Canary Island Circle, just 14 kilometres from Disney, Feltrim is offering a spacious family home with four bedrooms (yes, four) and two bathrooms, a heated and screened swimming pool and its own garden. The property sits within a gated community that boasts an 18-hole golf course and fishing lakes. This Florida property is currently on the market for just $125,000 (?68,000).

However, before you pack your bags (and your chequebook), it should be remembered that, when the price of a property seems too good to be true, it usually is. Residential appraiser Al Franks sounds this note of caution for overseas buyers: “In some places I see signs of stability, and in other places I don’t. A home may look good on paper, but then you drive by and a lot of the neighbouring homes have grass up to your knees.”

There are also pitfalls for the unsuspecting overseas buyer, such as a two-tier tax system, which is not favourable for non-residents; and the fact that, if you’re seeking a Florida property as a holiday rental, you must ensure it sits within an authorised short-term rental zone.

Golf development property is usually a good bet for those with rental returns and long-term growth on their minds, and another Orlando apartment from Feltrim, at the Southern Dunes Golf and Country Club, could prove a winner with singles and couples, as the development boasts one of the top-ranked courses in Florida. This upmarket development is well located for Disney and Orlando and has lots of on-site facilities and nearby sport and leisure amenities, including a large communal swimming pool and a fishing lake. All that, yet the one-bedroom condominium is on the market for only $115,000 (?62,500).

For those still wondering whether the time is right to jump into the turbulent waters of the Florida property market, it should be said that there are signs of change. Orlando’s residential resale market recorded its second-best sales month of the year in July, and local realtors are saying an improvement in the number of pending contracts bodes well for the rest of 2008.

Prices of property in Kissimmee are a touch higher, but in a very attractive area another large single family home on the market with the British Homes Group – and boasting four bedrooms, a luxury kitchen, swimming pool and large garage – could be yours for just $175,000 (?95,000). On the face of it, this is out of our price range; but let’s not forget that this is a buyer’s market and you should arrive ready to negotiate hard.

For confirmation that the Florida property market is truly being cut down to size, we move south down the coast, to Delray Beach, situated between the seriously upmarket resorts of West Palm Beach and Boca Raton. Here, an attractive two-bedroom apartment with vaulted ceilings is currently on the market, offering numerous facilities on the doorstep, such as a pool, gym, spa, clubhouse and tennis courts. Downtown Delray and the beach are a mere ten minutes’ drive away and the property is on the market for $145,000 (?78,800).

Of course, if you’re looking for something a little more luxurious for your ?80,000, you might want to consider vacation ownership (yes, it’s timeshare, but that’s not a dirty word in the States).
The high-end Starwood Hotels and Resorts has a Vacation Ownership arm that owns Sheraton Vistana Villages, a luxury resort with some 1,500 one-, two- and three-bedroom villas. The development boasts three pools plus a children’s pool, tennis courts, poolside restaurant, staffed recreation centre, two fitness centres and lavish tropical landscaping throughout, and buyers automatically gain access to Starwood’s international Vacation Network. Annual weeks at Vistana Villages can be purchased from around $10,000 (?5,450).

Those selling Florida property will always say now is the right time to buy. However, there does seem to be a groundswell of opinion pointing in the direction of at least a bottoming out of property prices by the end of the year. One thing’s for sure, if you love Florida and you can afford to throw ?80,000 at a Florida property, you’ve just about run out of reasons not to buy.

The last addition to the collection of tax reform propositions is pending review from the Taxation and Budget Reform Commission. It would repeal most of school property taxes, replacing them with the inclusion in the state sales tax of SERVICES that are mostly exempt at the present time.

In 1987, the taxation of services lasted for only a few months and was repealed by the Florida legislature under strong opposition by business interests.

The proposal was sponsored by Commissioner John McKay, a former Florida Senator. It came immediately under attack by business interests who claim that it would mainly affect small business and cause the losses of thousands of jobs. They claim that very few states levy taxes on services; service business could be easily transferred to neighboring states. The Coalition for to Protect Florida’s Economy (which is said to represent more than 200,000 employers) is strongly opposing the proposition.

The proposal would allegedly cut total property taxes by about 40% and has received some approval by different groups who claim that it would be of great relief for businesses who now pay a disproportionate share of property taxes.

It would apparently target areas that are now exempt, such as legal fees, accounting, printing, transportation, automobile repairs, while retaining the non-taxation of food, medicine, electricity and some essential services.

This new proposal is aimed at correcting the shortcomings of the now legislature- approved tax reform that will go on the ballot on January 2008, which do not provide major relief to owners of non-homestead properties, as well as business and investment properties owners.

My opinion: Reduce taxes, reduce taxes, reduce taxes . Not by swapping creativity, not by increasing one tax to reduce the next one, not by ignoring the main issue. Which is: Reduce expenses, reduce expenses, reduce expenses.

Our bubbling bureaucracy, our absurd multiplication of services, our unreachable goals of pensions and benefits for the ever-increasing class of public employees is the real issue and the real problem to be solved.

Our teachers are the lowest paid in the US, but most of the proposals to reduce property taxes will further compromise schools budget.

However, we still have a ridiculous amount of small cities with their own water departments, fire departments, mayors, commissioners, parties, cultural departments, and so forth. And the prospect of pension plans for this whole new class is an ominous threat on our future.

Is this an economical way to spend our money? Citizens’ consensus is NO.
Magic cannot be performed without real reforms. Our public service expenses have not created a better school system (Florida has one of the worst in the whole country), has not improved citizens’ quality of life. It has just gobbled the billions of dollars of property over-taxing and will not give up a penny without a bitter fight. As an example: Some cities have compensated some of their mandated taxes roll-back by charging for previously free services. Did anybody notice?

Is anybody going to put together a proposal that addresses the real causes of the problem, not its consequences?

While for some, buying a home is a life changing event and big financial investment, surprisingly there is about one tenth of home owners that belong to the increasingly mobile upward class and look to invest in the real estate market beyond their first home. The attractive rates of interests, as well as, very strong home market scenarios and the larger incomes of this working class of people is prompting them to go for a second home.

Second home is a wealth building strategy for a majority of people. So, investing in these properties that might fetch some rental income could be a great deal in the long-term. In this case vacation homes are the best places of investment.

For those that are prompted to purchase a second home to use as a holiday retreat, looking to invest in vacation resorts or retreats is a beneficial task. They can be secluded or within a community and it is a personal choice as to which will best suit the interests of the buyer. Inquire about the prices of properties in secluded areas, as well as, crowded communities before making a final decision.

Purchasing a second home has never been so easy, thanks to federal laws. Having said so, one needs to make a smart decision. Approaching a real estate expert is not a bad idea as he can assist you on the financial as well, as technical considerations,of buying a second home.

If you have a plan of only investment, ask the expert for different options of property management. If you aim to have some standard rental income from your second home, location becomes very important. It is better to approach an expert in the place that you have decided to buy who knows the intricacies of the laws in that respective place.

Please bear in mind the tax implications of renting a home (even if the house is rented for 15 days in a year you need declare the income from rent, as well as, be ready to pay tax.) Approach a tax consultant and know its implication on your future finances.

Vacation retreats or vacation rentals, it entirely depends on you as to what purpose you want to buy a second home for. However, you need to take time and do diligence and need to look at every property that you may want to buy, with a what-will-it-be-tomorrow perspective and invest in one that promises appreciation.

If you own more than one home and are facing foreclosure, you are probably worried about the bank going after your second home if you are unable to save the first. Bank representatives and armchair foreclosure experts will threaten you with being sued again and losing your other home, having your other assets repossessed, and maybe even having your bank or retirement accounts stolen or wages garnished. Fortunately, however, many of these predictions will never turn into reality.

The issue of foreclosure does need to be taken seriously, though, and finding out your options should be the first consideration. The first thing you should do is consider various other solutions instead of just letting a house go through the foreclosure process. Try and get as much time as you can from the bank, even if a sheriff sale is coming up; the bank can postpone any foreclosure proceedings in the local courts or cancel an auction to give you more time to work on a solution.

You might want to consider trying to list your house for sale, even if you have to do it with a short sale and convince the bank to take less than the total amount you owe on the loan. Otherwise, if there is really no way to save the home and the lender is unwilling to do a short sale, you can offer the bank a deed in lieu of foreclosure, which will, upon the bank’s acceptance of the offer, stop foreclosure and allow you to give the house back to the bank instead of going through the entire legal process and seeing your house auctioned off by the county.

But if the house does go into foreclosure and you do lose it to a sheriff sale, this does not mean the bank can go after your other house or any other assets you still possess. A number of different requirements must be met for a bank to try and sue you again after the foreclosure. Most of these requirements are easy to meet, but the last one usually guarantees that the bank will not take the time to pursue another lawsuit to go after your other personal items or additional homes.

First, the house has to sell at the county auction for less than the total amount owed on the loan at the time of the sheriff sale. This is usually pretty easy to meet, since the bank will have added thousands of dollars in fees so that no one in their right mind (not even the bank) would pay that much for the house. Usually, it is the foreclosing bank that places the only bid on the property, and they bid the minimum amount, so the house is likely to sell for far less than the total amount owed. The bank will end up with the property and a convenient write-off for the lost portion of the debt.

Second, your state has to allow deficiency judgments in the case of foreclosure. Not all states allow this in their foreclosure laws, so make sure you look up your law and find out if they can sue you and under what circumstances. Even if the lender is allowed to pursue another lawsuit, the type of foreclosure used, whether judicial or nonjudicial, can also be a determining factor in how difficult it will be to start the lawsuit and how it must be pursued.

Finally, you actually have to have something of value that the bank would want, usually some highly liquid asset the bank can easily seize. That does not mean having another home, to be clear. If the bank got nothing back from you on this foreclosure, what makes you think it would be worth their time to go after your other home? Would they get anything for their time and money, or would they most likely just get stuck with losing even more money when the home sells for too little at an auction to pay off even the existing mortgages, let alone a deficiency judgment?

So, maybe the bank could go after your other house after you lose one. But, in practical terms, banks almost never do this, since it just is not worth their time. It costs them more to hire attorneys to sue you for the original foreclosure, then sue again after that for a deficiency judgment, then sue you again for foreclosure on your other home because of nonpayment of the deficiency judgment. And in the end, they will probably still end up with nothing to compensate them for their total expenses.

The average citizen and resident of the State of Florida knows little if anything about legislation and initiatives currently being proposed to greatly alter their lives. When I found out about the Save Our Homes Amendment, my first reaction was that on its face it sounds good.

That however is the danger as special interest groups (and the legislators serving them in return for…) often use clever language to conceal and obscure their true intent and what they desire to accomplish. Nowadays the powerful serve themselves, not we the people. Therefore we the people must be all the more knowledgeable, studied, and astute.

When I wrote the chairman of the Save Our Homes Amendment who pioneered the legislation, Lee County Property Appraiser Ken Wilkinson, I was pleasantly surprised when he wrote me back within a day. What however was a bit disheartening was when I asked for the direct link to the legislative amendment itself, Mr. Wilkinson only provided me a link to the petition.

Nevertheless I read the petition, which on its face sounds good for Florida homeowners (especially those who would like to move elsewhere in the state and buy a new home). What troubled me however was the last sentence on the petition, which reads:

“Thereafter the new homestead property shall be assessed as provided herein.”

That being said, how come nothing else was written or provided therein pertinent to that clause? What is coming hereafter that we homeowners need to know about?

Omissions and distortions are the modus operandi of slick tongued legislators not desirous of letting we the people in on their true motivations. Purporting to serve the people, they talk sweet but the rest that remains to be seen is always yet to be discovered.

Here are some of my recent discoveries (and the search and rescue of the Florida homeowners continues).

John Sebree, Vice Pres. of Public Policy for the Florida Association of Realtors, recently wrote my sister saying:

“The calculators you are looking at are not taking into consideration the revenue cap on local govt ad valorem taxes that can be collected from this point forward. Personal income has increased an average of 4.2 percent each of the past ten years and the Gov just signed a bill that limits the amount of taxes a city or county can collect to that same personal income growth factor. That is a point the media refuses to acknowledge.”

So in other words there is a move to not “limit” property taxation to annual 3% increases, but move it up to the new Governor approved and permitted 4.2% now allowable.

Mr. Sebree further wrote: “The US Constitution would prohibit portability in the way we want it. It appears portability would violate the US Constitution’s ‘right to travel’ clause. We are working on a way to make it constitutional and that can be added in.”

The million-dollar question however is who is “we” — certainly not the taxpaying homeowner. I dare say “we” is the tax assessors and county property appraisers working for them.

Mr. Sebree assured my sister in her 50s who can’t afford to move and pay in an enormously increased tax bracket on a new home: “If you stay in your house forever you are still protected under this new language (as you said, assuming it even makes it on the balot and passes). The amendment as written grandfathers you in so you never lose your Save Our Homes if you stay.”

Why than is Save Our Homes not saying that? The “if you stay” part is huge for homeowners across the state on a fixed and limited income who can’t afford massive taxation increases on their home. Consider the retired elderly, ill, single-parent, and those who are unemployed. If the elderly or ill need to move closer to family for home health care; the single-parent marries and moves elsewhere; and the unemployed relocates to take a job—either of these scenarios means much higher property taxes and the elimination of the 3% cap.

This therefore becomes a huge deterrent for the above mentioned when economically, medically, occupationally, and maritally considering their options.

My guess is those behind this legislative amendment are preparing to move into a new home and/or relocate to their dream houses before the property tax cap is removed. While the “super exemption” may help a bit get folks into a home, after 5 years in that home expect the taxes to increase dramatically. That isn’t being understood by most people.

Other legislation less heard about to be aware of which further reveals the true intent of the state of Florida and where we are heading is:

ARTICLE VII FINANCE AND TAXATION, SECTION 4, SECTION 6

Homestead Exemptions shall be indexed, removed from Flood V Zones and Save our Homes repealed
07-04

Beginning in 2007, or the year after the property tax exemption was enacted, homestead shall be indexed. “Save our Homes” assessment cap shall be phased out over 10 years. Residual “SOH” cap shall be fully portable only during phase out period. Flood V Zones property shall not be available for property tax homestead exemptions. Properties in Flood A Zones shall have annual exemption increases limited by 1/2 index.

This is being sponsored by the Hurricane Insurance Creation out of St. Petersburg, chaired by John Jeffrey Lane. The sponsor of the initiative alone should be sufficient to alert you as to who are the beneficiaries of such an amendment.

The Hurricane Insurance Creation is pushing to get hurricane insurance incorporated into homeowner property taxes and thereby “flood the market” with their policies by reason of the private-public initiative. Interestingly, they are simultaneously pushing to pull the former Save Our Homes property tax cap. If this goes through, the insurance industry wins big and homeowners suffer monumental losses annually.

If you don’t read the amendment now and vehemently speak, soon we the homeowners will weep!

ARTICLE VII SECTION 9. SECTION 19. ARTICLE X SECTION 27

Hurricane Insurance as a Local Property Taxing Authority at Market Value
07-03

Create Hurricane Insurance with component flood and windstorm perils (FHW) that shall be written by the State on all Florida properties whether municipal, public residential or commercial, except in Coastal Barrier Resources Areas or other “Properties Ineligible”. All properties except “Properties Ineligible” shall have vouchers and separate accounts. Hurricane Insurance shall be a local property taxing authority and part of the annual property taxes.

Remember the government doesn’t love us as much as they say and ambiguity is the tendency of special interest groups (and the legislators they buy to favor their cause) proposing initiatives that really aren’t in the best interest of we the people.