Homestead Exemption and Portability Benefits for Florida Homeowners – What Does it Mean?
What is a homestead exemption?
A benefit that allows a homeowner (and their spouse) to protect the value of his or her principle (or primary) residence from creditors, rising property taxes, and the unfortunate situations that can arise from the death of the homeowner spouse. Basically, a homestead exemption allows a portion of your home’s value to be removed from taxation. In Florida, voters approved a property tax homestead exemption of up to $50,000. This would be applied to the value of the primary residency to “reduce the value for assessment” by $50,000. Here’s a simple Homestead Exemption PDF provided by Florida’s Department of Revenue to show exactly how the $50,000 could be applied to a given property.
Who Determines the Value of my Property?
How Else Does Having a Homestead Exemption Protect Me?
Besides the $50,000 tax exemption, Florida voters approved a Florida Constitutional Amendment known as “Save Our Homes,” that was designed to set limitations on increases in the assessed value of a homestead residence. Basically, a “cap” of 3% or the change in the CPI (consumer price index), whichever is lower, is placed on a homestead residence to limit the annual increase in the value of your property. The Save Our Homes Benefit is the difference between the assessed value and the market (or just) value of your homesteaded residence. In other words, as time passes and a difference accumulates between the assessed value and the market value of your home, the difference is your benefit. There are even more property tax benefits you should know about that are available for homestead property owners. You can see a full list at the Department of Revenue’s website.
So How Does Portability Help Me?
If you are eligible (applications must be completed for both a homestead exemption and a transfer of homestead assessment difference), portability allows homeowners to transfer (or port) the savings they have accumulated over the length of their homestead! Remember that Save Our Homes Benefit described above? Homeowners can transfer up to $500,000 in SOH Benefit from their old Florida homestead to a new homestead in Florida to lower the tax assessment of the new homestead. This means tax savings! There is an unlimited amount of times you can take advantage of portability, but it only applies to counties within Florida, and timing is of the essence. Check out the examples outlined on this SOH and Portability PDF provided by the FDR.