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Resolution Electing to Not Exempt Certain Rental Properties From Ad Valorem Taxes If Such Properties Meet Criteria Under Section 196.1978(3) (d)1.a. Florida Statutes a/k/a Live Local Act Property Tax Exemption
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BRIEF OVERVIEW
Due to concerns from various counties with Section 196.1978(3), Florida Statutes (the Live Local Act Property Tax Exemption), which requires the Hernando County Property Appraiser to exempt certain rental properties from ad valorem taxes if such properties meet the criteria of the Live Local Act Property Tax Exemption, known as the Multifamily Middle Market (MMM) Property Tax Exemption, the 2024 Florida Legislature adopted a change to the Live Local Act Property Tax Exemption, which beginning with the 2025 tax roll, allows taxing authorities to annually “opt out” of providing the Live Local Property Tax Exemption if residents in multifamily projects whose annual household income is between 80 and 120 percent of the median annual adjusted gross income and if the taxing authority finds that the latest Shimberg Center for Housing Studies Annual Report, prepared pursuant to Section 420.6075, Florida Statutes, identifies that the number of affordable and available units in the MSA or region is greater than the number of renter households in the MSA or region for natural person or families who meet the income criteria for 80 to 120 Tax Exemption.
This new legislation does not affect (a) any 80 to 120 Tax Exemptions that may be granted by the Property Appraiser for 2024 or (b) the 100% Live Local Act Property Tax Exemption for rental housing below 80% of the AMI.
The latest Shimberg Annual Report identifies a surplus of affordable and available units in the Tampa-St Petersburg-Clearwater MSA, in which Hernando County is located, for those households that meet the income criteria for 80 to 120 Tax Exemption. Copies of the relevant pages from the 2023 Shimberg Report are attached. Based on the Data in the 2023 Shimberg Annual Report, Hernando County qualifies to opt-out of the 80 to 120 Tax Exemption for 2025.
Florida Housing Coalition conducted an analysis to project annual property tax revenue impacts to the County if the County were to continue allowing 75% MMM Exemption. The analysis is intended to help the county decide whether to opt out of the 80 to 120% AMI exemption.
As a result of information shared in the presentation and meeting the criteria to take this action, staff recommends the Board adopt the attached Resolution opting out of the 80 to 120 tax exemption for 2025. The adoption requires a 2/3 vote or greater of the governing board. The Resolution can be renewed annually if Hernando continues to meet the affordable and available criteria of the opt out provision.
FINANCIAL IMPACT
None.
LEGAL NOTE
The Board has authority to act on this matter pursuant to Section 196.1978(3)(o), Florida Statutes.
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RECOMMENDATION
It is recommended that the Board approve and authorize the Chairman’s signature on the attached associated resolution.