Living in Florida has benefits other than the incredible weather. Florida’s homestead laws are one of the best features of living in the Sunshine State. Florida has the Save Our Homes Act, Portability, and numerous Homestead Exemptions, all of which help decrease your property tax burden – as long as the Florida residence is your primary residence.
The most well-known exemption in the primary homestead exemption, which allows for a $50,000 standard exemption as long as the property is used as the primary residence and not for investment.
The Save Our Homes Act states that homestead properties in Florida will not incur an increase of more than 3% per year or CPI (Consumer Price Index) – whichever is less, in the taxable value of their home. No matter how much the market value of a home increases, the taxable amount will not increase more than 3% per year.
Portability is the difference in the assessed value of a home – what taxes are based on, and the market value of a home – what the home would sell for in an open market. With portability, you can take the savings with you in your next Florida purchase, up to a maximum of $500,000, which could be a tax savings of nearly $10,000 a year. It is important to understand there is a time restriction of buying the next property – you have 2 years from the time you sell your primary residence to the time you purchase your next primary residence. As the seller, you must file for portability before you sell.
There are many programs in Florida that allow for additional property tax breaks. They included, but are not limited to: Homestead Exemption, construction for older family members, exemption for longtime limited-income seniors, deployed service members, surviving spouse of person killed in military service, surviving spouse of first responder, disabled veteran, and other disabled people.
It is important to understand that the amount of property tax paid on a home will change with new ownership. When property changes hands, all exemptions are removed, and the property is reassessed so the assessed value is equal to the just value. These changes go into effect on January 1, following the purchase of the property. The new owner will pay the previous owner’s taxes for the remainder of the first year owned. It is important to remember that you must apply for homestead exemption by March 1, following ownership of the home on January 1.