This summer I had posts on “Texas lousy for retirement home” and residential property tax rates across the United States.

At first, Florida property tax rates don’t look high but not terrible at $7.89 per $1,000 of assessed value compared to Arizona’s $6.11 per $1,000. (Texas is $18.17 per $1,000!)

But it turns out Florida has a two-tier system of property taxes where new Florida homeowners pay more property taxes than long time homeowners.

is florida over?

An excellent article in the Wall Street Journal Online detailed the slowing growth in Florida. (I was surprised that even public school enrollment is down in Florida!)

The item that really caught my eye, however, was about Florida property taxes.

Florida property taxes

… the state has created a two-tiered tax system that hit newcomers and part-time residents harder than longer-term residents. For tax purposes, permanent residents receive a $25,000 “homestead” reduction in the assessed value of their home, which reduces their property taxes. A 1992 amendment to the state’s constitution caps the annual increase in residents’ assessed home value at 3% a year or the rate of inflation, whichever is lower.

The effect is that over the past few years, as home values have soared, newcomers have paid higher tax bills. For instance, the owner of one North Tampa house assessed at $214,764 paid $1,992 in taxes last year, according to the Hillsborough County property appraiser’s office. A new owner, who made it his primary residence, would pay about $3,820 in taxes next year…

Arizona doesn’t discriminate against new homeowners.

Arizona treats new homeowners fairly and with respect. New homeowners in Arizona don’t pay extra property taxes like they do in Florida (and California).

This is especially important for retirees.

Florida homeowners insurance costs

The article also mentions that the very high homeowners insurance costs in Florida have also hurt growth.

Rising insurance rates prompted by hurricanes are also eroding Florida’s appeal. The average premium for homeowner’s insurance in Florida was $929 in 2004, the fourth-highest of any state in the country. In Hillsborough County, rates on a five-year-old $150,000 house range from $940 to $2,313 a year.

Advantage, Arizona. We don’t have hurricanes. (Or earthquakes for that matter.)

Anyone planning to buy a sunny retirement home or second home should be sure to include the costs of property taxes and homeowners insurance when calculating the costs of owning a home. You have to pay property taxes and homeowners insurance every year so those costs really add up fast.

Looking for a retirement home

When you take into account property taxes and homeowners insurance, you’ll find that living in Arizona is even more beautiful.

Call me if you would like more information about buying a retirement home or second home in beautiful, fair Arizona.