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Understanding Homestead Property Tax Portability in Florida

Writer's picture: Coastlantic Home BuildersCoastlantic Home Builders

Homestead portability is a unique and valuable property tax benefit available to homeowners in Florida. This provision allows homeowners to transfer the "Save Our Homes" (SOH) benefit from one homestead property to another within the state. The SOH benefit, established by an amendment to the Florida Constitution in 1992, caps the annual increase in assessed value of a homestead property at 3% or the change in the Consumer Price Index (CPI), whichever is lower. This helps homeowners by limiting the growth of their property taxes.


Here's how homestead portability works:

  1. Eligibility: To qualify for homestead portability, a homeowner must have had a homestead exemption on their previous property and must establish a new homestead within two tax years of selling the former homestead.

  2. Portability Benefit: The amount that can be transferred is the difference between the market value and the assessed value of the previous homestead, up to a maximum of $500,000. This benefit can significantly reduce the assessed value and, consequently, the property taxes on the new homestead.

  3. Application Process: Homeowners must apply for portability with their county property appraiser. This involves submitting Form DR-501T (Transfer of Homestead Assessment Difference) along with their homestead exemption application for the new property.

  4. Calculation: The property appraiser's office calculates the portability benefit by determining the difference between the just value (market value) and the assessed value of the previous homestead. This difference is then applied to the new homestead's just value, reducing its taxable value.


For example, if a homeowner sold a property with a just value of $400,000 and an assessed value of $250,000, the portability benefit would be $150,000. If the homeowner then purchased a new homestead with a just value of $350,000, the assessed value of the new property would be $200,000 ($350,000 - $150,000).

Homestead portability provides a significant financial advantage, enabling homeowners to move without losing the tax benefits accrued over the years. This can be especially beneficial for retirees or families looking to downsize or relocate within Florida while maintaining manageable property taxes.

In conclusion, homestead portability in Florida offers a valuable opportunity for homeowners to transfer their property tax savings from one home to another, ensuring continued tax relief and financial stability.

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