Changes in Property Tax Progressivity for Florida Home owners after the "Save Our Homes Amendment"

Abstract

The "Save Our Homes Amendment" (SOHA) to Florida'sconstitution limits annual increases in the taxable value of ahomestead property to 3% or the rate of inflation (whichever isless) as long as the property is owned by the same owner. Theamount of property value protected from taxation throughout thestate by this amendment has grown to over $246 billion (13.9%of total property value) since the amendment's implementationin 1995. This study tests whether the protection has accrueddisproportionately over time among homestead property owners,the very group of people the amendment was intended to protect.The results suggest that the amendment has reduced the degreeof progressivity in the state's property tax system such that theowners of lower value home properties are shouldering anincreasing proportion of the property tax burden relative to theowners of higher value homestead properties. The differentialimpacts of the SOHA across value ranges of homesteadproperties are likely attributable to differential appreciation andownership transfers for higher and lower value homesteadproperties throughout the state.