The Florida Constitution provides this tax-saving exemption. The Homestead Exemption on your Permanent Residence in Florida provides you three (3) important tax savings. (1) Homestead Exemption, (2) Save our Homes Act and (3) Portability. Exemptions are a big source of lost property tax savings, so you need to be aware of what is available and how long you have to file. Timing is important.
In Florida, property taxes are paid in arrears. Property taxes are not assessed until November of the year in which they are due. This means that if your closing takes place anywhere between January and the first week of November, the amount of the current years property taxes will not be known. For this reason, property taxes are based on the previous year’s tax amount. Tax proration divides the property taxes between buyer and seller, with the buyer responsible for taxes up until the property is sold to the seller. On the closing statement, the seller will give credit for the amount of taxes for “their” part of the year to the buyer. The buyer will then pay the full amount when the tax bill comes out.
Once your property has closed you should file for Homestead Exemption. Save our Homes is automatic with your Homestead Exemption. Portability is a benefit for the Florida Resident who sells their Homesteaded property and purchases another Permanent Residence in Florida.
(1) Homestead Exemption
The Homestead Exemption in Florida allows you to reduce the “Assessed Value” (What your Property Tax is based on) of your Home by the standard exemption of $50,000. The first $25,000 is exempt from all property taxes. The next $25,000 of the assessed value is taxable. The second $25,000 of the $50,000 exemption applies to the assessed value between $50,000 and $75,000 but does not include a benefit on the school tax.
In addition to the standard deductions there are several additional exemptions you may qualify for. Go to the County Property Appraiser Web site (Links below) to determine if any apply.
(2) Save our Homes Act (SOH)
Homesteaded properties in Florida will not see an increase of more than 3% a year or CPI (whichever is less) regardless of how much the market may have increased. Someone who has lived in their home for several years will have a tax bill far lower than their assessed value may indicate. The assessed value will never be more than the just value of your home.
(3) Portability
On January 1, 2008 Florida’ Portability tax benefit went into affect. Portability allows most Florida homestead owners to transfer their SOH benefit from their old homestead to a new homestead, lowering the tax assessment and, consequently, the taxes for the new homestead. You must establish a homestead exemption for the new home within three years of January 1 of the year you abandoned the old homestead (not three years after the sale).
With Portability you can take your savings with you up to $500,000. This would provide you a much lower tax bill per year. Portability is the difference between the Property Appraiser’s Just Value of a property and the Save Our Homes value of that property
When the Homesteaded property changes ownership the SOH benefit is lost and Property Tax is reassessed to “Just Value”.
Some changes that will not trigger a reassessment are:
- A change or transfer between spouses
- Certain transfers upon death
- Certain transfers when the same persons are entitled to the homestead exemption both before and after the transfer.
Supporting Documents and Web Sites for Florida Dept. of Revenue Property Tax Oversight
Broward County Property Appraiser
