Florida Live Local Act: Tax Exemptions for Multifamily Properties & Affordable Housing

Understanding the Florida Live Local Act

The Florida Live Local Act was introduced to incentivize the development and maintenance of affordable housing through a structured tax exemption program. Starting in 2024, multifamily property owners who meet specific criteria can apply for substantial ad valorem tax exemptions, potentially reducing their property tax burden by 75% or even 100%. The Act is designed to make it more feasible for developers to create housing that is accessible to income-eligible individuals and families.

Eligibility Criteria

To qualify for the tax exemption under the Live Local Act, properties must offer a minimum of 71 qualified units designated for affordable housing. These units must be rented to income-eligible individuals or families, with rents adhering to limits based on the most recent Florida Housing posted rates or 90% of the market rent, whichever is lower.

Properties that meet these requirements may receive a 75% exemption if rents are set at 120% of the Area Median Income (AMI), or a 100% exemption if rents are at 80% AMI. This distinction is crucial for property owners to understand as they plan their developments and apply for these tax benefits.

Overview of the Tax Exemption Program

Section 196.1978 of Florida Statutes outlines the ad valorem tax exemption program under the Live Local Act, which is specifically targeted at multifamily properties. From 2024 onward, eligible property owners can apply for this exemption, offering a significant opportunity to lower property taxes. The application process requires submission to local property appraisers, accompanied by a certification notice from Florida Housing. However, this certification alone does not guarantee exemption approval; the final decision rests with the local property appraiser, who will evaluate the documentation provided.

To be eligible, properties must offer a minimum of 71 units of affordable housing to income-eligible individuals or families for at least three years. Based on how well the properties meet the required criteria, they may qualify for a tax exemption of 75% or 100%. Additionally, the rents and income levels for these units must comply with specific limits. These limits could either be the most recent rent and income rates set by Florida Housing or 90% of the market rent determined by a rental market study, whichever is lower between the Florida Housing posted rent or the market rent.

Key 2025 Certification Application Updates

As we look ahead to the 2025 tax year, several important updates to the Live Local Act application process have been announced. These changes are critical for property owners aiming to secure tax exemptions under section 196.1978 of Florida Statutes:

• Portal Opening: The application portal for Multifamily Middle Market (MMM) certification will be available starting on September 30, 2024. Unlike the 2024 process, when applications were accepted until December 31, 2023, the deadline to submit your request for 2025 is earlier, on December 19, 2024, by 3 p.m.
• Rents and Tenants: By January 1, 2025, all properties seeking the exemption must ensure that their rents meet the specified requirements, and eligible tenants are occupying the units under consideration.
• Unit and Rent List Confirmation: Between January 1 and January 15, 2025, property owners must verify or update their unit and rent lists, ensuring all information is accurate. Submissions are due by 3 p.m. on January 15.
• Certification Notices: Florida Housing will issue certification notices to qualifying property owners and local property appraisers by February 15, 2025. This notice is necessary to move forward in the application process.
• Final Submission: Once the certification notice is received, it, along with the necessary application and documentation, must be submitted to the local property appraiser by March 1, 2025.

Top 5 Questions About the Florida Live Local Act

1. What is the purpose of the Florida Live Local Act?

The Florida Live Local Act aims to increase the availability of affordable housing by offering tax exemptions to multifamily properties that meet certain criteria. The legislation is a response to the growing need for affordable housing options in Florida, providing financial incentives for developers to invest in this sector.

2. How do property owners apply for the Live Local Act tax exemption?

Property owners must first obtain a certification notice from the Florida Housing Finance Corporation. This certification is based on the property meeting the necessary criteria for affordable housing. Once the certification is obtained, owners must submit it along with their application to the local property appraiser by the specified deadline. For 2025, this final submission must be made by March 1.

3. What are the key deadlines for the 2025 Live Local Act application?

Key deadlines include the portal opening on September 30, 2024, and the submission of requests to Florida Housing by December 19, 2024. Property owners must finalize their rent and tenant lists by January 1, 2025, and submit the certification notice to local property appraisers by March 1, 2025.

4. What are the benefits of the Live Local Act for property owners?

Property owners who qualify under the Live Local Act can receive significant tax reductions, with exemptions of up to 100% depending on the rent and income levels of the tenants. This not only reduces the financial burden on property owners but also encourages the development of much-needed affordable housing in Florida.

5. How does the Live Local Act impact affordable housing in Florida?

The Act directly impacts affordable housing by making it financially viable for developers to build and maintain properties that offer reduced rents to income-eligible tenants. By reducing property taxes, the Act lowers operational costs for property owners, which can translate into more affordable rent prices for residents.

Insights from Industry Experts

Florida Housing Finance Corporation emphasizes the importance of this legislation in meeting the state’s affordable housing goals, stating, “The tax exemptions provided under the Live Local Act are vital for encouraging the development of affordable housing. Our role is to ensure that the certification process is clear and accessible to all eligible property owners.”

Walter Duke, CEO of Walter Duke + Partners, also highlights the significance of the Act: “The Florida Live Local Act offers an unparalleled opportunity for property owners to contribute to the community by developing affordable housing while benefiting from substantial tax savings. Our team is committed to helping our clients navigate this complex process to achieve the best outcomes.”

Federal Regulations and Compliance

While the Florida Live Local Act is a state-specific initiative, property owners must also be mindful of federal regulations when pursuing these tax exemptions. Federal laws such as the Low-Income Housing Tax Credit (LIHTC) program can intersect with the Live Local Act, providing additional financial incentives for affordable housing projects. Compliance with federal standards, including Fair Housing Act requirements and HUD guidelines, is crucial for property owners to avoid legal pitfalls and maximize their benefits under the Live Local Act.

Navigating the Florida Live Local Act with Walter Duke + Partners

At Walter Duke + Partners, we specialize in providing expert guidance on property valuation, tax strategies, and compliance with housing regulations. The Florida Live Local Act presents a unique opportunity for multifamily property owners to enhance their financial performance while contributing to the availability of affordable housing. Our team is here to help you navigate the intricacies of the Live Local Act, from understanding eligibility criteria to completing the application process and ensuring compliance with both state and federal laws.

To learn more about how Walter Duke + Partners can assist you with the Florida Live Local Act, contact us today for a consultation.