Florida Save Our Homes Property Tax Assessment Limitation
In 1992, the Florida Constitution was amended to limit the annual increases in the assessed value of property receiving the homestead exemption to 3% or the percentage change in the Consumer Price Index, whichever is lower. This assessment limitation is commonly referred to as the “Save Our Homes” or “SOH” Cap.
Exceptions to that limitation include new additions or construction that escaped taxation in the past. Another exception would occur when a homestead property sells: the assessed value returns to fair market value in the year following the sale. That fair market value assessment then becomes the base value for “Save Our Homes” purpose for the new owner/homestead applicant.
Florida property tax homestead exemption reduces the value of a home for assessment of property taxes by $50,000, so a home that was actually worth $100,000 would be taxed as though it was worth only $50,000. However, the second $25,000 of homestead coverage does not apply to the school portion of property taxes -- and only applies to the third $25,000 of a property’s total just value (i.e., that portion of a property’s value between $50,000 and $75,000)
Florida Save Our Homes Portability Transfer
If a homeowner is moving from a previous Florida homestead to a new homestead in Florida, they may be able to transfer, or “port,” all or part of their homestead assessment difference. If they are eligible, portability allows most Florida homestead owners to transfer their "Save our Homes" benefit from their old homestead to a new homestead, lowering the tax assessment and, consequently, the taxes for the new homestead. How much of the difference between assessed and market value (“Save Our Homes difference”) can be applied depends on how the value of your new home compared to the value of your old home. Portability provides for the transfer of accumulated Save Our Homes benefit (up to $500,000) to a new homestead.
How Do I Calculate My Save Our Homes Portability Benefit
If the value of the new homestead is more than your previous homestead, the assessed value of your new homestead will be: the just value of the new homestead minus the lesser of (i) $500,000 or (ii) the difference between the just value and the assessed value of the prior homestead.
New Homestead Value - (Prior Homestead Value-Prior Homestead Assessed Value) = New Homestead Assessed Value
If the value of the new homestead is less than your previous homestead, you still receive a benefit in the same percentage you have in your current property. The assessed value of your new homestead benefit is calculated as: the just value of the new homestead divided by the just value of the prior homestead, multiplied by the assessed value of the prior homestead. However, if this calculation is greater than $500,000, the assessed value of your new homestead will be increased so that the difference between the just value and assessed value equals $500,000.
(New Homestead Value/Prior Homestead Value) = Percentage Benefit. Multiply this Percentage Benefit x Prior Homestead Assessed Value = New Homestead Assessed Value