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LEGISLATURE
2005
Tax
sought on sales of business property
A proposed real estate tax on commercial property deals is being touted as a way to help ease Broward's affordable housing crunch.
By Erika Bolstad
TALLAHASSEE - Frustrated by what they say is a lack of state money to help lower-wage workers afford housing, Broward County is considering its own tax on commercial real estate sales.
The county wants to pass state legislation that would tax every commercial real estate transaction in Broward.
The tax, 45 cents on every $100 of the sale price, would add $4,500 in taxes on the sale of a $1 million building.
Money collected by Broward County -- as much as $30 million a year, according to some estimates -- would go toward affordable housing programs. Similar programs already exist in other counties.
County commissioners backing the legislation say it stems from their frustration over the escalating cost of real estate in South Florida.
High real estate costs are pricing many young workers out of homes, said Commissioner Josephus Eggelletion.
''The real objective is, when you look at Broward County, we're beginning to lose good teachers, nurses, firefighters and other types of workers, because they can't find housing,'' Eggelletion said. ``It's simply not affordable to them.''
The legislation, which passed out of its first state Senate committee Tuesday, would allow Broward and Palm Beach counties to let voters decide in a referendum whether they want to allow the tax.
State Rep. Chris Smith, D-Fort Lauderdale, is sponsoring the House version of the legislation.
SIMILAR TAXES
Miami-Dade, Hillsborough and Monroe counties all have similar programs that capture real estate taxes to pay for affordable housing.
In Broward, the affordable housing money would:
• Subsidize closing costs and the purchase price for people of low and moderate incomes who are buying their first home.
• Help rehabilitate homes owned by older and lower-income smallpeople.
• Subsidize grants and loans to builders for affordable apartment complexes near transportation corridors.
STEADY SUPPLY
The money also would ensure that the county has a steady income stream for affordable housing projects, Eggelletion said.
He and some South Florida lawmakers are concerned that efforts to cap the amount collected by the state in other real estate transaction taxes will be limited in the future.
Gene Adams, who represents the Florida Association of Realtors, cautioned that any tax increase on commercial real estate would ultimately end up being passed on to consumers in the form of higher rents and higher prices.
''There is no free lunch, to the extent that commercial property has to pay that at closing,'' Adams told lawmakers Tuesday, during a Senate hearing. ``You will see that reflected in the price of goods and services.''
VOTERS TO DECIDE
Although both the governor and the leadership of the Florida House are often against legislation that raises taxes, the provision requiring a local referendum will likely make it an easier sell.
That way, it's a local decision to raise taxes, said Sen. Jeff Atwater, a Republican lawmaker who represents both Broward and Palm Beach counties and a sponsor of the legislation in the Senate.
It's up to the local county commissioners, Atwater said, ``if they can go sell it to the citizens as a need to assist those with housing challenges, if they are willing to take that to the voters to decide.''