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Florida Real Estate News

Business Lease Tax Cut Expected in June

A reduction in the state’s business lease tax – from 4.5% to 2.0% – is expected to take effect in June, weeks earlier than originally planned.

TALLAHASSEE – A reduction in a state tax on commercial leases could begin earlier than anticipated this summer.

The timing of the reduction is tied to replenishing the state’s Unemployment Compensation Trust Fund, which was depleted during the COVID-19 pandemic.

A report posted last week by the Legislature’s Office of Economic & Demographic Research showed that the unemployment fund is expected to be replenished to its pre-pandemic benchmark of $4 billion in March, earlier than expected. That would trigger the reduction in the commercial-lease tax to take effect in June.

The reduction had been expected to begin in August, a couple of months after the trust fund was restored.

“What does this mean for Florida businesses? A substantial reduction in the business rent tax from 4.5% to 2.0%, effective June 2024 – two months ahead of schedule,” the Tallahassee-based Florida TaxWatch said in a news release. “This change will result in approximately $1 billion in annual savings for taxpayers!”

A 2021 legislative deal tied together a reduction in the lease tax with a plan to require out-of-state retailers to collect sales taxes on purchases made by Floridians. As an interim step during the 2023 session, lawmakers reduced the lease tax from 5.5% to 4.5% on July 1, the start of the current fiscal year. The reduction was projected to save $219.3 million. The state has imposed the tax since 1969, and business lobbying groups have long sought to whittle the rate.

© 2024 The News Service of Florida. All rights reserved.

Florida Senate unanimously passes amended Live Local Act

The Live Local Act in Florida, implemented last year, is indeed expected to have a positive impact on affordable housing development statewide. The program’s focus on offering tax credits and exemptions is likely to incentivize developers to engage in affordable housing projects, especially in areas outside of the urban core where housing affordability may be a more pressing issue.

Non-urban-core communities like Homestead, Kendall, West Broward, and Lake Worth are likely to see increased activity in affordable housing development as a result of the Live Local Act. Developers may be more inclined to invest in these areas due to the potential benefits offered by the program, such as tax incentives, which can help offset the costs associated with developing affordable housing units.

Overall, the Live Local Act has the potential to stimulate affordable housing development in Florida, addressing the growing need for housing affordability in various communities across the state.

Court temporarily blocks Florida law barring Chinese citizens from owning property

A U.S. appeals court has halted the enforcement of a Florida law that bans Chinese citizens from purchasing property in the state, multiple news outlets reported.

The decision places the law on hold until the court rules on the merits of the case. The next step comes when the three-judge panel of the 11th U.S. Circuit Court of Appeals hears oral arguments in April.

Last Thursday, the Federal Court of Appeals for the 11th Circuit found grounds to suggest that the law, known as SB 264, clashed with federal statutes. The preliminary injunction applies to two individual plaintiffs, Yifan Shen and Zhiming Xu, who were working with real estate firm Multi-Choice Realty on property transactions when the law was passed in May 2023. The court stated that the plaintiffs’ “recent and pending transactions create the most imminent risk of irreparable harm in the absence of a stay.” 

Asian Real Estate Association of America (AREAA) President Jamie Tian applauded the court’s decision.

“This is an important step in having the law overturned,” Tian said in a statement. “Using national security as a misguided reason, Florida’s legislators and Governor wrongly targeted Chinese and other select groups of immigrants and their desire to purchase a home.”

The plaintiffs are represented by several law firms and civil rights organizations, including the American Civil Liberties Union (ACLU), DeHeng Law Offices PC, the Asian American Legal Defense and Education Fund (AALDEF), and the law firm Quinn Emanuel

Eleventh Circuit Judge Nancy Abudu criticized the new law, which restricts people from “Communist countries,” particularly China, from owning property in Florida.

“The statute’s language, the anti-Chinese statements from Florida’s public officials, and SB 264’s impact establish that the law is a blanket ban against Chinese non-citizens from purchasing land within the state,” Abudu said in a statement. “This prohibition blatantly violates the Fourteenth Amendment’s protection against discrimination.” 

The legal battle began in May 2023 when the ACLU initiated a lawsuit against the bill signed by Gov. Ron DeSantis, arguing that it violated equal protection and due process guarantees under the Constitution. A district court judge denied an injunction request in August.

Meanwhile, lawmakers in several Republican-led states, including TexasLouisiana and Alabama, are considering similar restrictions on Chinese citizens owning property, according to NBC News.

Source: www.housingwire.com