By Joseph E. Seagle, Esq.

👋 Happy Friday! Today would be the 🎂 birthdays of Nina Simone, Rue McClanahan, and Erma Bombeck, three talented, funny, and iconic women who helped shape my worldview as a teenager growing up in the foothills of Western North Carolina.

❗️Situation Awareness: FinCEN BOI filing is back (again … for now), and all non-exempt reporting companies (LLC’s and corporations) have until March 21, 2025 to file their BOI reports. We can help you with that if needed.

1 big thing: DeSantis Signals Support for Property Tax Elimination

Driving the news: Florida Governor Ron DeSantis has expressed support for eliminating property taxes, calling them an "oppressive and ineffective" form of taxation. The proposal would require a constitutional amendment, needing 60% voter approval. While details on revenue replacement remain unclear, the conversation has major implications for real estate professionals across the state.

Why it matters:

• Realtors: Without property taxes, affordability could improve, driving demand—but municipal service funding could suffer, impacting neighborhood desirability.

• Mortgage Brokers: Lenders may need to reevaluate risk models, as tax-free homeownership could alter payment structures and property valuation methodologies.

• Title Insurance Agents: Shifts in tax policies would affect lien enforcement, municipal obligations, and closing procedures.

The big picture:

• Florida relies heavily on sales tax revenue, but local governments depend on property taxes to fund police, fire departments, and schools.

• Florida’s median property tax bill in 2024 was $3,101, a 9.5% increase from the previous year, with South Florida seeing even sharper hikes.

• With insurance rates already among the nation’s highest, eliminating property taxes may attract new residents but could strain public services unless new funding sources are created for those.

• North Dakota floated a ballot measure in 2024 to eliminate property taxes there, but voters rejected it.

What’s next:

• If the proposal gains traction, expect a heated debate over alternative funding mechanisms — likely increased sales tax or targeted fees.

• Local governments will push back unless a clear revenue replacement is established.

• For now, real estate professionals should prepare for potential shifts in home affordability, property values, and market dynamics.

The bottom line: While a property tax elimination sounds attractive for property owners, it presents challenges for municipalities and real estate stakeholders alike. Investors, buyers, and industry professionals should stay informed as the policy debate unfolds.

Go deeper: CBS News Miami; NBC News Miami; HousingWire

2. Bill proposes undoing Florida’s 2022 insurance reforms

Florida’s property insurance landscape is poised for significant upheaval as new legislative proposals aim to reverse reforms implemented in 2022. Senator Don Gaetz has introduced a bill intended to reduce insurance costs; however, industry stakeholders expressed concerns that it may destabilize the market. 

The Big Picture: In 2022, Florida enacted comprehensive property insurance reforms to address escalating premiums and insurer insolvencies. These measures included limiting practices that led to excessive litigation and financial strain on insurers. 

The proposed 2025 legislation seeks to repeal key aspects of these reforms. Proponents argue that this will make insurance more affordable for homeowners. Conversely, insurers warn that undoing these changes could lead to increased litigation and financial instability within the market.

Why It Matters: For real estate professionals—realtors, mortgage brokers, and title insurance agents—these legislative shifts carry significant implications:

• Market Stability: Repealing the 2022 reforms may reintroduce volatility into the property insurance sector, potentially affecting property values and transaction volumes.

• Client Advisory: Professionals must stay informed to effectively advise clients, especially regarding potential changes in insurance premiums and coverage availability.

• Transaction Timelines: Increased market instability could lead to delays in closings, as securing affordable insurance becomes more challenging.

What’s Next

As the legislative session progresses, it’s crucial for industry stakeholders to monitor developments closely. Engaging with professional associations and participating in advocacy efforts can help ensure that the interests of the real estate community are represented.

Staying abreast of these changes will enable real estate professionals to navigate the evolving landscape effectively, ensuring they continue to provide informed and reliable service to their clients.

Go deeper: Insurance NewsNet; Florida Realtors; South Florida Sun Sentinel

This week’s Trust This video is about the top mistakes to avoid when choosing a trustee. Listen in or watch on your favorite streaming platform.

3. Catch up fast

1. Louisiana crawfish company sued over early-morning texts. The National Law Review

2. Veteran of U.S. credit rating downgrade hears alarm bells today. Wall Street Journal

3. How the immigration crackdown in Florida will affect the labor market, including the construction sector Orlando Sentinel (gift link)

4. An up-to-date list of all Trump/DOGE actions that affect the housing sector. HousingWire (gift link)

5. Housing starts were down almost 10% in January from the month before. NAHB Eye on Housing

6. Inflation hit a 7-month high of 3% in January, freezing the Fed in place on its rate USA Today

7. The January jobs report came in a little soft at 143,000 new jobs, but unemployment edged down to 4.0% from 4.1% JP Morgan Wealth Management

8. Which states saw property taxes jump the highest in 2024? Corelogic

9. Slower price growth and more supply is good news for homebuyers Redfin

10. But mortgage applications drop as buyers sit on the fence. MPAMag

4. Closing Thought:

Last Friday, we drove up to Asheville in our Equinox EV.* We got a late start and had the dogs with us, so we stopped for the night in Pooler, Georgia to recharge physically and literally (the car, that is).

On these trips is when I get a chance to “read” (think, Audible … listening) books, and our tastes trend to books on business. This time is a rerun, listening again to Gunderson’s Killing Sacred Cows.

One of the “sacred cows” he kills is the one that says you can save your way to wealth. Gunderson advocates for an abundance mindset rather than a scarcity mindset. I’ve written about that here in past editions because I agree that an abundance mindset is one that — if everyone possessed — would lift all boats, helping everyone who is aspiring to a better life.

However, I had to disagree with Gunderson when he wrote about a client he had advised to liquidate her 401K, pay the penalties and taxes, and use the money to buy a rental property. As he read this recounting from his book, I was screaming at the windshield, “No!!!! Why would you do that?????”

I don’t know if Gunderson knows about self-directed IRAs or solo 401K plans, but I felt bad for his client who had lost the penalties and taxes against her 401K withdrawal. Instead, she could have reduced her 401K contributions and instead contributed to an Individual Retirement Account, a Health Savings Account, and an Educational Savings Account. She could have then rolled the funds over to a self-directed IRA custodian. She could have created a self-directed IRA checkbook control LLC, and used the retirement account funds to purchase the membership interests of the LLC. She would be the manager of the LLC and thus in control of the funds without having to interact with the custodian.

At that point, she could have lent the money to borrowers, secured by a mortgage lien on real estate, or purchased tax liens, cryptocurrency, or any other non-prohibited asset that could grow faster than her 401 (k) funds. When she left her employer, she could roll over those 401 (k) funds into another IRA and use them to start another checkbook control LLC. With that, she could purchase a rental home, with the rent flowing back into her IRA to grow her wealth.

In short, don’t take everything you read or hear from a guru as gospel. Before taking any action that is going to cost penalties or lose tax-deferred status, talk with an attorney and a CPA to see if there’s another way to accomplish the same goal without taking the hit.

*In case you were wondering, this was the first time we’ve taken one of our EVs on a trip outside of Florida. We were able to drive from Orlando to Asheville on three charges. We spent about $40 on electricity. The charging added about two hours to the trip, but we used that time to eat and feed/walk the dogs during two charges, and the other one was the morning before we left Pooler while we got ready and packed up again. For comparison, when we drive our gas guzzler, it averages 10 hours to do the trip and costs about $120 in fuel. While EVs are great for daily driving around your local region (and they’re so fast and fun to drive), especially if you have a home charger, we agreed that we’ll keep a gas-powered large SUV for the foreseeable future for these long-haul trips.

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