Phasing Out Tax on Commercial Leases Key for Fla. Business Expansion
ORLANDO, Fla., March 2, 2015– As lawmakers kick off the 2015 Florida Legislature tomorrow, Realtors® from across the state are in Tallahassee, ready to address major issues of concern to all Floridians including: fully funding affordable housing; phasing out a tax on commercial rents; restoring water resources while protecting property rights; and capping fees charged by community associations for estoppel certificates.
“A vote for Amendment 1 last November was not a vote against housing,” says 2015 Florida Realtors President Andrew Barbar, a broker with Keller Williams Realty Services in Boca Raton. Amendment 1 requires that 33 percent of documentary stamp taxes collected on real estate transactions go toward water and land conservation.
“Affordable housing and the conservation of water and land resources are equally crucial goals for our citizens,” Barbar says. “Fully funding the Sadowski Affordable Housing Trust Funds would mean that many of our state’s neediest residents – those who are homeless, low-income families and veterans – would benefit from $267 million going into home buying and rental assistance programs.
“Not only does a strong housing policy help strengthen and revitalize our communities, housing also creates jobs and helps to drive Florida’s economy forward.”
The 140,000-members of Florida Realtors understand the importance of making their voices heard as lawmakers take up the challenge of helping Florida grow and prosper, while also protecting the state’s quality of life for residents and visitors now and in the future, says Carrie O’Rourke, Florida Realtors’ vice president of public policy.
Tax on commercial leases
Florida is the only state that taxes commercial rents, O’Rourke says. Commercial tenants pay a 6 percent sales tax on rent and expenses (such as landscape services, insurance and property tax), and local governments may charge an additional discretionary sales surtax.
Florida Realtors supports legislation that would lower the tax from 6 percent to 5 percent beginning in 2015.
O’Rourke adds, “In an effort to make Florida more competitive and business-friendly, the Legislature really needs to phase out this tax. Adding sales tax to rent can be the difference in whether a small business can stay in business. Since Florida is the only state in the nation that charges this additional tax, it is very anti-competitive and puts our businesses at an economic disadvantage. We’ve heard from many business owners who say they could expand, hire more workers or raise salaries if this tax were to be eliminated or phased out.”
Statewide water policy
Florida Realtors supports legislation to develop a comprehensive statewide water policy that restores Florida’s water resources while protecting property rights. As lawmakers get to work on the issue, they should consider:
- Using monies from the Land Acquisition Trust Fund to sustain and manage land and resources the state already owns.
- Supporting programs that keep our springs, lakes and other water bodies free of harmful pollutants. Any approach to manage these levels should be science-based and comprehensive.
- Expanding the use of alternative water supplies and allowing for new water storage efforts on agricultural lands.
Estoppel certificate fees
Owners of properties governed by a condominium or homeowners’ association must provide buyers or lenders with a statement of their financial status with the association before they can sell or refinance their home. This document is known as an estoppel certificate.
While Florida law allows community associations to charge a “reasonable” fee to prepare an estoppel certificate, some have turned this administrative task into a revenue stream, at times charging over $500 to prepare an estoppel certificate.
Florida Realtors supports legislation that would cap the fees that associations charge at $100 for owners who are current in their assessments; and sets a $50 added fee for expedited estoppel certificates and updated certificates. The $50 fee would also apply to owners who are delinquent in paying their assessments.
To find out more about Florida Realtors’ legislative priorities this year, go to http://www.floridarealtors.org/LegislativeCenter/TopInitiatives/index.cfm.