Bills making their way through the Florida Legislature would give a tax break to homeowners in flood zones.
Under the legislation, property owners who elevate their homes to prevent flood damage would not have to pay taxes on the added value of the improved structure.
The bills are designed to help coastal communities, including Pinellas County where more than 50 percent of the tax base is located in special flood hazard areas, Pinellas County Property Appraiser Mike Twitty said during a St. Petersburg City Council committee meeting earlier this month.
Special flood hazard areas are the A and V zones on flood maps and are those most likely to flood.
Council member Brandi Gabbard said mitigation is important to sustainability and resiliency. Council Chairman Ed Montanari said the idea should have been considered a long time ago.
“In my district I have a lot of homes that are vulnerable, especially in a neighborhood like Shore Acres. There’s so many homes and it gets so expensive to do any kind of mitigation,” Montanari said.
Twitty suggested the legislation to its sponsors — Rep. Linda Chaney, R-Treasure Island, and Sen. Jeff Brandes, R-St. Petersburg — after he found a provision in state law that addresses calamities. It allows homeowners to rebuild after a flood or fire and essentially hold their taxable property value steady, as long as they don’t exceed 110 percent of the total square footage of the original home.
“I started looking at that and said why can’t we be proactive and apply that to the properties within the special flood hazard area,” Twitty said.
Currently, owners who elevate their homes so that the lowest finished floor level is above the base flood elevation have to pay higher property taxes when their home is reassessed to account for the new construction.
“What we’re saying with this legislation is we won’t count that lower level against them. We won’t put it in that 110 percent calculation, because we want them to maintain the same living area when they go up in the air,” Twitty said.
It would also apply to new construction for homes that can’t be elevated, he said.
“This would provide an incentive for new housing or flood-compliant housing and get it out of harm’s way. We would ultimately, in my opinion, be adding value to the tax roll over time. Whenever a property changes hands, the cap is going to reset … and there will be a recapture of the total value back to the tax roll,” Twitty said.
During debate over the proposal in a Florida House committee, Rep. Randy Fine, R-Palm Bay, said he worried the measure would allow wealthy people to buy older beachfront property, tear it down, rebuild it and not have to pay taxes on it before selling it, according to a report in Florida Politics.
“This is not just an issue of trying to do something for waterfront property owners. This is an issue for properties all over,” Twitty said.
In Pinellas County, 72 percent of single-family homes in special flood hazard areas are non-waterfront properties. Those homes have a median value of about $228,000, Twitty said.
“You will have housing stock that only had a couple of decades left, that was probably going to get hit by more floods and the value would get driven down,” Twitty said. “Now you have more resilient housing that will last 75 to 100 years potentially and be built at a strong building code and will protect the tax base for years to come.”
If approved by the legislature, the proposal would require a state constitutional amendment. It would be on the November 2022 general election ballot. If it wins approval from 60 percent of voters, it would become effective Jan. 1, 2023.