I think a large property tax deduction makes much more sense than a large income tax deduction. (Although a universal deduction that lets you apply to any taxes makes the most sense.)
For someone who is retired or incapable of working, property taxes can far exceed the cost of food and utilities, and income tax deductions do them no good.
Of course, there's no guarantee that anyone will own their own property, but making it an option for retirement planning makes a self-sustaining retirement much more likely, especially so for those who have to retire unexpectedly, due to illness or injury.
Yup, I personally don't like it because as a retired homeowner myself, I need the currently working population to pay taxes to sustain my lifestyle.
All this talk of taxing me just for living?! It's ridiculous. We should tax those whippersnappers taking all the jobs. They have the energy to pay taxes. Those days are behind me.
If they don’t have a property or wage tax, how are they going to pay for any state or local services? Their sales tax isn’t particularly high… Are they going to try and do it on the backs of tourists and non residents? Risky, as there’s lots of places to go that are warm on the ocean.
Florida makes its cash from tourism but it is a deceiving because they cut the funding for their services or deny services by downloading the costs to municipalities and so municipalities have to levy taxes.
> If they don’t have a property or wage tax, how are they going to pay for any state or local services?
In Iowa, the strategy has just been to gut all state and local services as much as possible, and then run what's left at a deficit while blaming the other side.
If it gets real bad the people near the border will shop in neighboring states like anywhere else.
But that rules out most of the well-known coastal destinations where there are no neighboring states.
Realistically a local government should be able to levy a sales tax of some kind on the real estate itself, but perpetual obligations on personal property are not right because it's just too confiscatory in effect, if not intention.
Easy. They're going to rely even more on federal funds, as many red states do. And as long as they keep supporting Trump, he won't threaten to turn off the faucet.
And they'll get even further down the line of "red states scream bloody murder about socialism while being supported by the socialism of blue states".
> Why would blue states pay property taxes in Florida?
The GP may be referring to something like the difference between the taxes that are collected federally and paying of various services ('balance of payments'):
> In FY 2024, the federal government collected around $5.07 trillion from states and their residents through taxes on individuals and businesses and redistributed about $4.87 trillion back to states and residents through programs like Social Security, Medicaid, Medicare, food stamps, and education grants.
In terms of states that are subsidized, that could happen. If Florida changes status from a have-state to a have-not state the it will receive a subsidy. For now it has a lot of income from tourism but that could change but not in near future. Certainly Canadians will abandon it sooner or later if they get milked . Nobody in the right mind would stick around to subsidize billionaires who are avoiding taxes . American tourist can surely foot bill. Florida municipalities get downloaded on and they raise their property taxes.. It is not sustainable for sure.
Did you not read the GP at all? Florida currently pays $11B more than it receives from the feds. Since it is a large state this is percentage wise close to break-even but your claim is provably false.
By definition, blue states prefer taxation of its residents. This belief will be part of blue state policies whether Florida taxes or does not tax Canadians.
You have a point. The article clearly states who'd get the tax cut, the Florida residents with homesteaded homes and the loss of revenue would fall on local governments. I don't see any where mention where the replacement for the $11 or so billion a year in revenues the local government could lose will come from, whether federal or state. Leaves one to wonder the worse.
This article seems to focus on Canadians as a politically convenient example of those residents who might pay more but the design of the mechanism as described applies to non-homestead properties in general, no just Canadian-owned ones.
Election cycles are the worse. I see the same back and forth fights dealing with budget cuts and cutting services. Sigh! Mainstream Press, no matter the country behave the same during election cycles :(
For those that didn’t read the article, there’s a constitutional amendment on the ballot that will eliminate or drastically reduce property taxes for permanent residents’ primary residence. The income will be made up by allowing property taxes on other property (AirBnb, rentals, commercial, second homes, etc.) to increase by 5% per year. It requires a 60% majority but seems likely to pass.
I always find it interesting to think about second-order consequences of actions like this. Here’s some I can think of:
1. Canadians sell their winter homes and leave the state in droves. They’re already upset about Trump’s political rhetoric.
2. Home prices plummet as stock floods the market. This is good for people who want to buy their first home. Many of these homes are in locations attractive to retirees.
3. Rental costs start increasing steadily to cover the increased taxes. This pushes people to buy homes, stabilizing home prices, but at a lower rate than before.
4. Small businesses catering to retirees and vacationers struggle as their customer base evaporates. Small businesses catering to new homeowners flourish.
5. Local government across the state are underfunded. The 5% yearly increase isn’t enough to cover the loss of income for many years to come. This either results in loss of services and blight or other taxes going up significantly. I’m guessing local sales taxes, but I don’t know what funding options exist. Schools are hit particularly hard.
—
With housing shortages across the coasts, taxing secondary residences, AirBnb, etc. actually does seem like a good idea. Vancouver BC did it to combat Chinese investment homes that were standing empty, and I believe it worked out well for them.
I’m not sure how this will work out for Florida. I’m not confident it was well thought-out, but that may just my bias that Trumpers are fueled more by rage and greed than sense. It will be interesting to see how this plays out. I hope things work out for people in Florida.
Property taxes are among the best taxes. They're highly efficient, they encourage development on underutilized land.
The Federal Reserve has also found they improve the affordability of buying homes, which leads to younger people getting into the housing market faster.
A land value tax is even better, because it doesn't financially discourage improving your property, and it strongly increases the incentive to sell or develop underutilized land.
The "island economy" can be an interesting thought exercise for getting a feel for economic concepts, from money and banking all the way real estate and taxes.
Imagine the first guy arriving on the island claiming the whole land to be his, and any successive arrivers have to rent space from him in perpetuity, at rates he can decide. Not great, but not immediately obvious what a minimally-invasive improvement would look like. Now add a tax that forces the first guy to pay for every acre of land he claims. This incentivizes him to give up some of the space he's not actually using. Even in the most "rational agents in a frictionless vacuum" type of free-market macroeconomic model this is going to lead to a more efficient outcome, even more so in a more Keynesian-style model.
Property taxes replacing state taxes means that Florida is dumping cost of its services on municipalities. There is no magic. It is very unlikely that it will be sustainable. As soon as Florida introduces state taxes, the zillionaires avoiding taxes exit.
Property taxes make the real estate market function better. If you don't need or use the property, you don't want to keep paying property taxes so you list your property for sale.
One of the things that's also supposed to be good for the market is for buyers to reach for the biggest home they can qualify for.
>younger people getting into the housing market faster.
Most places have this but Florida also has much more retirees on fixed incomes.
There's another bunch of buyers who can barely afford to get in to begin with, so another target group to be jetissoned after everything they have to give has been extracted. If other expenses are rising due to inflation that's enough of a threat, but taxes will naturally need to rise faster than inflation and that's what puts young first-time buyers over the edge along with the seniors.
Unfortunately that's a lot who are in a more precarious position relative to rising costs of any kind.
The very, very worst of which are non-discretionary costs.
And taxes of any kind are the biggest threat in that category.
The primary purpose of property tax is to have a claim to the property by the taxing authority, first & foremost.
Not like there's any question.
If the "owner" can't pay the tax during any of the perpetually-occurring critical periods, the property is lost relatively quickly.
OTOH with regular & proper payment of the tax, it will eventually cost more in taxes than the purchase price to begin with. Inflation will accelerate this process dramatically and if the property happens to have appreciated, the total expenditure per year can easily be more than any average small business can afford. And that's for a property which was originally purchased on a single income. Compare that to the security and sustainability of having it bought and paid for outright instead.
Property taxes are one of the major factors that put single incomes out of the running.
Obviously there's a difference in the equations you would use if you were limited to theoretical approaches, compared to witnessing first-hand how neighborhoods can rise right out of the Everglades, become populated, then everybody get taxed out of there in more-or-less one generation. Repeatedly. So fast it would make their head spin in California.
By the time 1978 rolled around I was watching Proposition 13 with interest because Floridians were so much more desperate already. That's the type of future Calif voted to prevent. In pre-air-conditioning Florida we were just a canary being non-industrial small-town retirement communities, California was always affluent and crowded so they had critical mass to do something about it.
Without Proposition 13, this is what you get, or something like this.
The least destructive tax is only on commerce, all others prove detrimental if not devastating, depending on rate.
Not just bad for "the" market, worse for a "free market", and chips away at the fundamental wealth a community could better rely on otherwise.
It is not a bad idea to have Canadians completely diverge from US economy. Sell it and take your money back to Canada.
Nevertheless, Canadians own something like 500k properties of 7M-10M properties in Florida. The $12B of tax deficit carried by those properties alone would raise their taxes to $24k a year per year for $300k property; Good luck collecting. In 4 years they would lose $100k of property price to taxes so its a no brainer that they would sell and get out and they would never look back. Canadian Snowbirds will obviously choose places like Mexico to just rent; why buy.
They are going to transfer the ownership to Americans and then what? Then the deficit would even rise faster to $13B .
I think a large property tax deduction makes much more sense than a large income tax deduction. (Although a universal deduction that lets you apply to any taxes makes the most sense.)
For someone who is retired or incapable of working, property taxes can far exceed the cost of food and utilities, and income tax deductions do them no good.
Of course, there's no guarantee that anyone will own their own property, but making it an option for retirement planning makes a self-sustaining retirement much more likely, especially so for those who have to retire unexpectedly, due to illness or injury.
Yup, I personally don't like it because as a retired homeowner myself, I need the currently working population to pay taxes to sustain my lifestyle.
All this talk of taxing me just for living?! It's ridiculous. We should tax those whippersnappers taking all the jobs. They have the energy to pay taxes. Those days are behind me.
It makes sense if you want to prioritize a population of landowners who don't work.
What if you want to get rid of a bunch of retirees before they die off naturally?
How much incentive does it take?
What about all the people who can't afford a home?
If they don’t have a property or wage tax, how are they going to pay for any state or local services? Their sales tax isn’t particularly high… Are they going to try and do it on the backs of tourists and non residents? Risky, as there’s lots of places to go that are warm on the ocean.
Florida makes its cash from tourism but it is a deceiving because they cut the funding for their services or deny services by downloading the costs to municipalities and so municipalities have to levy taxes.
Nevada has low sales and property taxes but heavily supplements it with excise and gaming taxes aimed at tourists, so that strategy does work.
> If they don’t have a property or wage tax, how are they going to pay for any state or local services?
In Iowa, the strategy has just been to gut all state and local services as much as possible, and then run what's left at a deficit while blaming the other side.
>Their sales tax isn’t particularly high
Where else is there a real upside?
If it gets real bad the people near the border will shop in neighboring states like anywhere else.
But that rules out most of the well-known coastal destinations where there are no neighboring states.
Realistically a local government should be able to levy a sales tax of some kind on the real estate itself, but perpetual obligations on personal property are not right because it's just too confiscatory in effect, if not intention.
I mean just don’t have that state service.
I’m sure the members of say the Palm Island Home Owners Association don’t want their tax dollars going outside of Palm Island.
I take it you haven’t been to Florida much during election season, Stop Socialism is a common billboard.
Easy. They're going to rely even more on federal funds, as many red states do. And as long as they keep supporting Trump, he won't threaten to turn off the faucet.
And they'll get even further down the line of "red states scream bloody murder about socialism while being supported by the socialism of blue states".
Something tells me federal taxpayers (or more precisely, those in blue states) will end up footing the bill for this.
Why would blue states pay property taxes in Florida? Even if Florida declares bankruptcy and no other state will foot the bill.
> Why would blue states pay property taxes in Florida?
The GP may be referring to something like the difference between the taxes that are collected federally and paying of various services ('balance of payments'):
> In FY 2024, the federal government collected around $5.07 trillion from states and their residents through taxes on individuals and businesses and redistributed about $4.87 trillion back to states and residents through programs like Social Security, Medicaid, Medicare, food stamps, and education grants.
* https://usafacts.org/articles/which-states-contribute-the-mo...
Currently Florida 'paid in' more than it 'took out'.
In terms of states that are subsidized, that could happen. If Florida changes status from a have-state to a have-not state the it will receive a subsidy. For now it has a lot of income from tourism but that could change but not in near future. Certainly Canadians will abandon it sooner or later if they get milked . Nobody in the right mind would stick around to subsidize billionaires who are avoiding taxes . American tourist can surely foot bill. Florida municipalities get downloaded on and they raise their property taxes.. It is not sustainable for sure.
Florida already gets more than it gives. Lowering their tax income will exacerbate that
Did you not read the GP at all? Florida currently pays $11B more than it receives from the feds. Since it is a large state this is percentage wise close to break-even but your claim is provably false.
By definition, blue states prefer taxation of its residents. This belief will be part of blue state policies whether Florida taxes or does not tax Canadians.
The federal govt, not the state govt is the one doing the taxing in this situation. The blue state taxes are a total non sequitor
You have a point. The article clearly states who'd get the tax cut, the Florida residents with homesteaded homes and the loss of revenue would fall on local governments. I don't see any where mention where the replacement for the $11 or so billion a year in revenues the local government could lose will come from, whether federal or state. Leaves one to wonder the worse.
This article seems to focus on Canadians as a politically convenient example of those residents who might pay more but the design of the mechanism as described applies to non-homestead properties in general, no just Canadian-owned ones.
Election cycles are the worse. I see the same back and forth fights dealing with budget cuts and cutting services. Sigh! Mainstream Press, no matter the country behave the same during election cycles :(
For those that didn’t read the article, there’s a constitutional amendment on the ballot that will eliminate or drastically reduce property taxes for permanent residents’ primary residence. The income will be made up by allowing property taxes on other property (AirBnb, rentals, commercial, second homes, etc.) to increase by 5% per year. It requires a 60% majority but seems likely to pass.
I always find it interesting to think about second-order consequences of actions like this. Here’s some I can think of:
1. Canadians sell their winter homes and leave the state in droves. They’re already upset about Trump’s political rhetoric.
2. Home prices plummet as stock floods the market. This is good for people who want to buy their first home. Many of these homes are in locations attractive to retirees.
3. Rental costs start increasing steadily to cover the increased taxes. This pushes people to buy homes, stabilizing home prices, but at a lower rate than before.
4. Small businesses catering to retirees and vacationers struggle as their customer base evaporates. Small businesses catering to new homeowners flourish.
5. Local government across the state are underfunded. The 5% yearly increase isn’t enough to cover the loss of income for many years to come. This either results in loss of services and blight or other taxes going up significantly. I’m guessing local sales taxes, but I don’t know what funding options exist. Schools are hit particularly hard.
—
With housing shortages across the coasts, taxing secondary residences, AirBnb, etc. actually does seem like a good idea. Vancouver BC did it to combat Chinese investment homes that were standing empty, and I believe it worked out well for them.
I’m not sure how this will work out for Florida. I’m not confident it was well thought-out, but that may just my bias that Trumpers are fueled more by rage and greed than sense. It will be interesting to see how this plays out. I hope things work out for people in Florida.
Property taxes are the worst kind of taxes. Nobody should be fined just for owning something. Once it's taxed once, it should never be taxed again.
Property taxes are among the best taxes. They're highly efficient, they encourage development on underutilized land.
The Federal Reserve has also found they improve the affordability of buying homes, which leads to younger people getting into the housing market faster.
https://x.com/cremieuxrecueil/status/1955007478078255107
https://www.minneapolisfed.org/article/2024/how-higher-prope...
A land value tax is even better, because it doesn't financially discourage improving your property, and it strongly increases the incentive to sell or develop underutilized land.
The "island economy" can be an interesting thought exercise for getting a feel for economic concepts, from money and banking all the way real estate and taxes.
Imagine the first guy arriving on the island claiming the whole land to be his, and any successive arrivers have to rent space from him in perpetuity, at rates he can decide. Not great, but not immediately obvious what a minimally-invasive improvement would look like. Now add a tax that forces the first guy to pay for every acre of land he claims. This incentivizes him to give up some of the space he's not actually using. Even in the most "rational agents in a frictionless vacuum" type of free-market macroeconomic model this is going to lead to a more efficient outcome, even more so in a more Keynesian-style model.
> Imagine the first guy arriving on the island claiming the whole land to be his
That reminds me of this comic, though it's more about how the first-guy can evolve some self-serving philosophies about it.
https://existentialcomics.com/comic/234
Property taxes replacing state taxes means that Florida is dumping cost of its services on municipalities. There is no magic. It is very unlikely that it will be sustainable. As soon as Florida introduces state taxes, the zillionaires avoiding taxes exit.
Property taxes make the real estate market function better. If you don't need or use the property, you don't want to keep paying property taxes so you list your property for sale.
One of the things that's also supposed to be good for the market is for buyers to reach for the biggest home they can qualify for.
>younger people getting into the housing market faster.
Most places have this but Florida also has much more retirees on fixed incomes.
There's another bunch of buyers who can barely afford to get in to begin with, so another target group to be jetissoned after everything they have to give has been extracted. If other expenses are rising due to inflation that's enough of a threat, but taxes will naturally need to rise faster than inflation and that's what puts young first-time buyers over the edge along with the seniors.
Unfortunately that's a lot who are in a more precarious position relative to rising costs of any kind.
The very, very worst of which are non-discretionary costs.
And taxes of any kind are the biggest threat in that category.
The primary purpose of property tax is to have a claim to the property by the taxing authority, first & foremost.
Not like there's any question.
If the "owner" can't pay the tax during any of the perpetually-occurring critical periods, the property is lost relatively quickly.
OTOH with regular & proper payment of the tax, it will eventually cost more in taxes than the purchase price to begin with. Inflation will accelerate this process dramatically and if the property happens to have appreciated, the total expenditure per year can easily be more than any average small business can afford. And that's for a property which was originally purchased on a single income. Compare that to the security and sustainability of having it bought and paid for outright instead.
Property taxes are one of the major factors that put single incomes out of the running.
Obviously there's a difference in the equations you would use if you were limited to theoretical approaches, compared to witnessing first-hand how neighborhoods can rise right out of the Everglades, become populated, then everybody get taxed out of there in more-or-less one generation. Repeatedly. So fast it would make their head spin in California.
By the time 1978 rolled around I was watching Proposition 13 with interest because Floridians were so much more desperate already. That's the type of future Calif voted to prevent. In pre-air-conditioning Florida we were just a canary being non-industrial small-town retirement communities, California was always affluent and crowded so they had critical mass to do something about it.
Without Proposition 13, this is what you get, or something like this.
The least destructive tax is only on commerce, all others prove detrimental if not devastating, depending on rate.
Not just bad for "the" market, worse for a "free market", and chips away at the fundamental wealth a community could better rely on otherwise.
Think of it as an HOA fee that you pay to your society.
It is not a bad idea to have Canadians completely diverge from US economy. Sell it and take your money back to Canada.
Nevertheless, Canadians own something like 500k properties of 7M-10M properties in Florida. The $12B of tax deficit carried by those properties alone would raise their taxes to $24k a year per year for $300k property; Good luck collecting. In 4 years they would lose $100k of property price to taxes so its a no brainer that they would sell and get out and they would never look back. Canadian Snowbirds will obviously choose places like Mexico to just rent; why buy.
They are going to transfer the ownership to Americans and then what? Then the deficit would even rise faster to $13B .
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