Dear Mr. Harper,
Re: Discrimination Against Canadians in Florida
We need your help to explore possible Canadian government action to counter the outrageous two-tier discriminatory property tax system in Florida. At the end of this note I have a list of actions the Government of Canada can take to secure equitable treatment for Canadian snowbirds in Florida.
The much awaited ten day special session of the state of Florida legislature on property taxes came to conclusion within three days with hardly any substantive discussion or debate. The light at the end of the tunnel turned out to be a train. The taxes that were to “drop like a rock” did so for homesteaders, but may end up crushing snowbirds.
What was needed is rollback of county and municipal expenditures to a level consistent with inflation and growth. What we got is possibly an average of 7% reduction per taxpayer for one year, after about 100% expenditure increases and tripling of snowbirds’ taxes since 2002. I say possibly, since the county and municipal politicians were given an “override” vote to allow them not to comply with even the small legislated reductions and Palm Beach County property appraiser Nikolits already declared that property values increased 5% last year (which is truly strange since by my review of sold properties in first half of 2007 there is about a 20% drop compared same period in the previous year). Of course, any real or imaginary property value increases in excess of inflation, translate into changes in assessed property values for non-homesteaders only, which means that additional portion of the expenditures is being shifted to snowbirds (businesses and renters).
What we needed is “Same Tax for Same Value”, instead what we got is “super-exemption” to further increase the benefits to the already much advantaged homesteaders. If this “super-exemption” passes in the next January constitutional vote, the result will be to further offload Florida’s spending onto the part-time owner-resident snowbirds (and businesses and renters) in future years. As the generous additional tax reductions promised to homesteaders are unlikely to be matched by corresponding cuts expenditures, the excess cost will fall on non-homestead properties of snowbirds. What we’ll end up with is many snowbirds being forced to abandon their dreams of wintering in their Florida homes that they worked and saved for during their working lives and forcing them to sell into a market of falling prices, when they can no longer afford to pay their taxes. Some who can afford to pay the outrageous confiscatory taxes may grin and bear it, while others who can will become homesteaders (not a widely available or preferable option to Canadians and other foreigners). Still others, even if they can afford it, will decide that they’re no longer willing to be suckers paying 3-10 times their neighbors’ taxes, and just move out to other southern states that still welcome snowbirds.
But the most significant, in fact the root cause of the current Florida property tax mess, is that the usual control that voters exercise on free spending politicians, i.e. that they can vote them out, does not apply in Florida. The vast majority of voters, being homesteaders, are unaffected by expenditure increases; in fact, despite 15-20% a year increases in expenditure, most Florida voters saw their property taxes fall each year, as the load was shed onto non-homesteader snowbirds. This open loop system remains unchanged and will likely lead to continuous out of control spending and corresponding financial devastation on many snowbirds.
The only way that the gap between homesteaders’ and snowbirds’ property taxes will be substantially reduced is if real estate prices will drop by about 50% from the peak, which cannot be ruled out since sold property prices have already dropped by about 20% (despite Palm beach County property appraiser’s contrary declaration). All other scenarios lead to an aggravated situation for snowbirds.
So what can the Canadian government do to help secure equitable treatment for Canadian snowbirds in Florida? Here are some preliminary ideas: 1. Table an official protest against the discriminatory treatment of Canadians. 2. Study NAFTA and Canada/U.S. Tax Treaty for possible violation of these treaties 3. If discriminatory taxation is not a violation under #2, then future changes should consider make it a violation 4. Collect up-to-data statistics on the benefits that Canadian visitors to Florida bring to the state, and lobby U.S. federal and Florida state governments. 5. Introduce equally discriminatory property tax regime in Canada on American property owners, and possibly make whole Canadians who are being taken advantage of in Florida Any other ideas that you may have to assist in resolving this highly discriminatory situation would be much appreciated.
Thank you, Peter Benedek RetirementAction.com
The much awaited ten day special session of the state of Florida legislature on property taxes came to conclusion within three days with hardly any substantive discussion or debate. The light at the end of the tunnel turned out to be a train. The taxes that were to “drop like a rock” did so for homesteaders, but may end up crushing snowbirds.
What was needed is rollback of county and municipal expenditures to a level consistent with inflation and growth. What we got is possibly an average of 7% reduction per taxpayer for one year, after about 100% expenditure increases and tripling of snowbirds’ taxes since 2002. I say possibly, since the county and municipal politicians were given an “override” vote to allow them not to comply with even the small legislated reductions and Palm Beach County property appraiser Nikolits already declared that property values increased 5% last year (which is truly strange since by my review of sold properties in first half of 2007 there is about a 20% drop compared same period in the previous year). Of course, any real or imaginary property value increases in excess of inflation, translate into changes in assessed property values for non-homesteaders only, which means that additional portion of the expenditures is being shifted to snowbirds (businesses and renters).
What we needed is “Same Tax for Same Value”, instead what we got is “super-exemption” to further increase the benefits to the already much advantaged homesteaders. If this “super-exemption” passes in the next January constitutional vote, the result will be to further offload Florida’s spending onto the part-time owner-resident snowbirds (and businesses and renters) in future years. As the generous additional tax reductions promised to homesteaders are unlikely to be matched by corresponding cuts expenditures, the excess cost will fall on non-homestead properties of snowbirds. What we’ll end up with is many snowbirds being forced to abandon their dreams of wintering in their Florida homes that they worked and saved for during their working lives and forcing them to sell into a market of falling prices, when they can no longer afford to pay their taxes. Some who can afford to pay the outrageous confiscatory taxes may grin and bear it, while others who can will become homesteaders (not a widely available or preferable option to Canadians and other foreigners). Still others, even if they can afford it, will decide that they’re no longer willing to be suckers paying 3-10 times their neighbors’ taxes, and just move out to other southern states that still welcome snowbirds.
But the most significant, in fact the root cause of the current Florida property tax mess, is that the usual control that voters exercise on free spending politicians, i.e. that they can vote them out, does not apply in Florida. The vast majority of voters, being homesteaders, are unaffected by expenditure increases; in fact, despite 15-20% a year increases in expenditure, most Florida voters saw their property taxes fall each year, as the load was shed onto non-homesteader snowbirds. This open loop system remains unchanged and will likely lead to continuous out of control spending and corresponding financial devastation on many snowbirds.
The only way that the gap between homesteaders’ and snowbirds’ property taxes will be substantially reduced is if real estate prices will drop by about 50% from the peak, which cannot be ruled out since sold property prices have already dropped by about 20% (despite Palm beach County property appraiser’s contrary declaration). All other scenarios lead to an aggravated situation for snowbirds.
So what can the Canadian government do to help secure equitable treatment for Canadian snowbirds in Florida? Here are some preliminary ideas: 1. Table an official protest against the discriminatory treatment of Canadians. 2. Study NAFTA and Canada/U.S. Tax Treaty for possible violation of these treaties 3. If discriminatory taxation is not a violation under #2, then future changes should consider make it a violation 4. Collect up-to-data statistics on the benefits that Canadian visitors to Florida bring to the state, and lobby U.S. federal and Florida state governments. 5. Introduce equally discriminatory property tax regime in Canada on American property owners, and possibly make whole Canadians who are being taken advantage of in Florida Any other ideas that you may have to assist in resolving this highly discriminatory situation would be much appreciated.
Thank you, Peter Benedek RetirementAction.com
RetirementAction.com 