00:00Florida Governor Ron DeSantis unveiled a much-awaited proposal to gradually eliminate
00:05property taxes on the vast majority of primary homes in the state, a measure that would transform
00:11the way that the state finances itself. Here to discuss is Bloomberg's Anna Kaiser. And Anna,
00:16let's talk through this, right? Because if you eliminate property taxes,
00:20what is the governor's plan for how to offset that loss?
00:25So local governments are the ones that collect property tax. So he's saying that in wealthy
00:30communities like Palm Beach or here in Miami, where there are a lot of second homes, a lot of
00:36homes that are worth millions and millions of dollars, this would only eliminate the tax if
00:40your house is worth over half a million dollars. So he's saying in these wealthy parts of Florida
00:45that, you know, that's your tax base. It's the second homeowners, the super wealthy,
00:50you know, they can make up the difference there. For the rest of Florida, where most homes are under
00:58half a million dollars, he says he's going to make kind of a trust that will make those local
01:05governments then depend on the state government to, you know, keep the lights on and fix roads,
01:10parks, services, you know, all of that basic stuff that our property taxes fund.
01:15And I mean, when you think about this proposal, how likely is it to actually pass actually become
01:23something that potentially is something that is how the state operates its finances?
01:29Yeah, so I mean, it is a little bit of a long road. So he has DeSantis has called lawmakers
01:35into a
01:35special session next week. So they have to actually pass the proposal. So we may see some tweaks
01:40in the coming days. And then the legislature puts a referendum on the ballot in November. So then it
01:48has to pass voters. And in Florida, you need 60% of the vote for a referendum to pass. You
01:54know,
01:55when you ask people, do you want a tax cut? That's usually pretty popular. So in that sense,
02:01it could pass. But remember, there's millions of renters in Florida to really wouldn't get much
02:06benefit from a property tax cut or an elimination. You know, there's even a world where the tax burden
02:14shifts on to landlords, and then they pass that down to renters, it could actually make rent more
02:18expensive. So you know, it's definitely complicated. You know, with these referendums, the side that has
02:25more educating to do, obviously, you know, is at a disadvantage. It's kind of hard to explain to
02:30people, you know, how all of this works. So it'll be really interesting to see how cities and counties
02:38kind of try to counter this and maybe try to save their their ability to to tax in the way
02:44that they
02:45do currently. Right? Well, you touched on it a little bit, but I want to talk a little bit more
02:48directly about the potential ripple effects for the real estate market. Because you think about
02:53Florida, it's already a tax friendly state, we already see that migration from New York, particularly
02:58into Florida, where if this were to happen, if this were to become reality, I mean, is the expectation
03:06that that trend would become more exacerbated? Yeah, I mean, I think so. So many people move here
03:12for tax reasons already. So, you know, this would be a really, a really big one. You know, there's
03:19people on the other side of the argument that say that, you know, if you're not having essential
03:23services, that would eventually hurt property values. But, you know, if you're looking at your
03:28personal taxes, and you could move to Florida, you're maybe already have a second home here.
03:33And then you make this your primary residence, then you're not paying income tax, and you're
03:37not paying property tax. So, you know, it's already very low tax state. So if you are really
03:43looking to save that, that may mean, you know, all those snowbirds, you know, the people from the
03:48Northeast who live here seasonally, like maybe they would make this their permanent residence. I think
03:52that's what a lot of the real estate community is talking about right now.
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