Commercial real estate owners in Florida may face a significant increase in their property taxes in 2019. The property taxes will increase unless 60 percent of voters in the state agree to permanently extend a cap on the taxes assessed on non-homesteaded property. The issue will be settled via Amendment 2 on the November ballot.
In 2008, a 10 percent cap on tax increases for non-homesteaded property in Florida was enacted as a provision in the Save Our Homes Act. However, the legislation contained a sunset provision of 10 years. If the Amendment 2 cap is not passed with a “yes” vote by 60 percent of the voters, it will expire. This means that commercial property owners may expect a substantial tax hike beginning in 2019.
According to Florida Tax Watch, commercial property owners in the Sunshine State may experience a combined property tax hike of $700 million if the cap is not extended permanently. The organization reports that if the cap is not extended, the property tax increases will likely be passed along by commercial landlords to their tenants, meaning that rents could increase substantially. Before the cap was passed, property taxes in Florida rose by 113 percent from 2000 to 2007. A majority of this increase was borne by non-homesteaded commercial property owners.
If the cap is not extended, commercial property owners may want to talk with their real estate lawyers. Legal counsel could help an owner plan how to handle the increase if it happens. In addition, an attorney could help with any landlord-tenant disputes, especially issues related to rent collection.