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Time to prepare for Mother Nature's less maternal side

Two homes = more than twice the taxes

Here's one more reason we'll never own a vacation home in Florida: higher property taxes for seasonal residents.

Pensacola_beach_house_2 We've thought about it. When we lived in Maryland and made annual spring training and birding treks to Florida, we considered how nice it would be to have a condo of our own to serve as our vacation base. Then we'd rent it out the rest of the year and get some the tax write-offs there, too.

Even after we moved to the state, the idea persisted. With another house, we argued to ourselves, we'd be more inclined to take those planned weekend trips that always seemed to be displaced by other, more mundane tasks we felt we had to take care of on Saturdays and Sundays.

Now we're thinking about a condo at Port Aransas or a cabin at Ruidoso. As the hubby says, everybody needs a dream. But as far as dreams go, it looks like the Florida vacation residence one is a real tax nightmare.

According to this Wall Street Journal story (registration required), many snowbirds who own property in the Sunshine State have seen the taxes on those homes more than double over the last five years.

The culprit: Florida's dual-bracket tax system that allows municipalities to set the taxable value of properties at different levels for permanent and seasonal residents. In some instances, writes WSJ reporter Rafael Gerena-Morales, winter-only residents pay property taxes 10 times as high as those of neighboring permanent residents.

One local property appraiser sees no problem in the two-tier system. Kenneth Wilkinson of Fort Myers told the paper that anyone who owns a second home in Florida should bear higher property taxes because "they created the problem" of rising real-estate values by bidding up prices and by increasing the need for local services.

Of course, the underlying consideration here is that the seasonal residents don't -- can't -- vote for or against the local politicians who decided to tax them. It's like those American League pitchers who get to throw hard and high at batters, knowing they won't have to come to the plate to face retaliatory bean balls.

Is it right? Is it fair? Is it going to change?

Multitudes of ethicists will have to speculate on the first two questions. Technically, I can see the arguments for giving a break to people who live in the state year round. If you're committed to the area, contributing to the local economy and making other tax payments 365 or so days vs. 14 or 30 or even 180 days, then a tax break that makes you a happier, more productive citizen is all well and good. Sort of the state equivalent to a customer loyalty program.

Every state has various homeowner exemptions for its taxpayers. As I noted here, this year we're finally able to take advantage of the homestead exemption for our Austin house and it's already made a welcome difference, even before the Texas legislature changed our property tax rules.

Such a residency option is available to anyone who owns a home in Florida, even part-timers. All you have to do is file the paperwork declaring Florida is your permanent residence and voilà, the property tax exemption is yours.

But, as the WSJ story notes, many snowbirds are unwilling to become Floridians, if on paper only, because switching permanent residence would mean giving up tax breaks or other benefits they get from their home state.

And are Florida municipalities simply giving their permanent residents a break or are they really just taking easy advantage of part-timers?

I do have some sympathy for seasonal residents, as we were acquainted with several when we lived in Florida. Back there, our next-door neighbors on either side were snowbirds, one couple from Long Island, the other from Montreal.

We loved it. For six months a year we could go crazy without worrying about upsetting anyone or anything but the great blue herons and alligators that wandered behind our home.

The Long Islanders finally moved down to Palm Beach County full-time the year before we moved (OK, so that incursion into our mostly neighbor-free situation might have had some bearing on our desire to relocate), so at least they now get the homestead exemption.

As far as I know, however, the Canadians remain winter-only residents. Of course, they probably never worried too much about the property taxes anyway, as the Florida home was their third. They also had a permanent residence in Montreal and a lake cabin in the Laurentians for the summer to complement the Florida abode used December-through-May. Tough life, eh?

But other cold-weather inhabitants with less-secure finances might be finding their annual Florida getaways are not worth it. And that brings me to the third question: will the taxing system change?

If enough seasonal residents bolt the state for other warm destinations, then Florida will have to re-evalutate its taxing methods. If that happens, year-round Sunshine Staters might indeed be in a bit of tax trouble.

Down the Hatch: I've archived the Richard Hatch tax evasion sentencing poll. For the record, the voting was remarkably even, but those who thought he got too much prison time edged out "keep your clothes on, Dick!" The final results are in the lower left column. Thanks to all who voted.


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