Sen. Rick Scott introduced the Homeowners Premium Tax Reduction Act to allow an annual tax deduction of up to $10,000 for homeowners insurance premiums, aiming to reduce the financial strain on homeowners amid continually rising insurance costs.
Sen. Rick Scott introduced legislation on Wednesday to provide financial relief to homeowners facing rising insurance costs.
The Homeowners Premium Tax Reduction Act proposes an above-the-line tax deduction for homeowners insurance premiums, allowing individuals to deduct up to $10,000 annually for premiums paid on their primary residence. The bill also proposes an amendment to the Internal Revenue Code of 1986 by adding a section for homeowners insurance premiums, which will be included in the calculation of adjusted gross income, which intends to lessen the financial burden on homeowners by reducing their taxable income.
“The dream of homeownership is becoming out-of-reach for families under the Biden-Harris administration with high interest rates, 20 percent inflation on their everyday items, and soaring property insurance costs,” Scott said.
In a prepared release, Scott noted that while property insurance is managed by the states, federal action can help reduce costs.
“My new legislation will provide direct relief for families in Florida and across the nation with a deduction of up to $10,000 in homeowners insurance premiums paid on their primary residence,” he said.
The measure comes just a week after a report by Florida TaxWatch found the state’s property insurance rates to have surged by 42.5 percent since 2019 due to factors including hurricane damages and litigation pressures. The instability of the market has led to increased dependence on the state-backed Florida Citizens Property Insurance Company, which now insures at least 17 percent of the market.
Florida outdoes every other state in insurance costs, accounting for 10.8 percent of all premium costs in the U.S. According to the report, premiums vary between counties, ranging from $1,824 in Sumter County to $8,162 in Monroe County. Since 2019, the Legislature has passed a series of reforms in an effort to combat insurance fraud and ease the burden on insurers. The report noted that legislative efforts are beginning to show promise. However, it also advised that lawmakers remain vigilant to prevent the market from spiraling and work to enhance resiliency.