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Homestead Exemption & Portability: How to Save Money as a Florida Resident Homeowner

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Most Florida primary residence property owners are familiar with Florida’s homestead protection, but not as many are familiar with portability, the “Save Our Homes” (SOH) Amendment to the Florida Constitution, and its benefits. Both provide significant monetary assistance to Florida residents who purchase a home to live in in Florida.

In our recent blog, Understanding Homestead Protection and Trusts, we discussed how to qualify for homestead protection, especially with trusts. Below are a few quick refreshers on the tax benefits of Florida’s homestead protection:

  • Property owners must be a Florida resident and own and occupy the property as their permanent residence on January 1st of the year they are claiming the exemption.
  • The application deadline is March 1st of the year, for which the property owner is claiming the exemption.
  • For a single person, the exemption is $25,000, reduced from the assessed property value.
  • For married persons, the exemption is $50,000, reduced from the assessed property value.
  • There is a 3% cap on property tax increases on an annual basis (i.e., if property taxes increased 10% one year, the exemption would max at 3% and add the remaining 7% increase to the exemption)

An additional tax benefit to Florida residents is portability, which is the ability to transfer the SOH cap (the difference between the market value and assessed value) from an existing homestead property to a newly purchased homestead property.

Below are frequently asked questions on portability:

How is portability calculated?

  • If the just value of the new homestead property is more than the just value of the old homestead property, the property owner will be able to transfer their SOH cap up to the $500,000 limit. 
    • Example: The old homestead’s just value is $225,000, and the assessed value is $195,000, with a $30,000 SOH cap value. The new homestead’s just value is $300,000, so the transferred SOH cap of $30,000 reduces the assessed value to $270,000.

How long do property owners have to use the portability benefit?

  • Three consecutive tax years, meaning the new homestead exemption must be established within three years (tax rolls) from the last year of the previous exemption. 
  • Important to note: a property does not need to be sold; the exemption can be removed, but the property owner can continue to own the property
    • Example 1: If the old homestead property was sold in 2022 and the new homestead property was purchased in 2024. The SOH cap will transfer when the portability application is processed.
    • Example 2: If the property owner removed their homestead exemption in 2021, the property owner has until January 1st, 2024, to qualify and apply for portability for the 2024 year.

How do property owners apply for portability?

  • When applying for homestead exemption, they will complete a DR-501T (Transfer of Homestead Assessment Difference) form.

Can portability only be used once in a lifetime?

  • No, portability can be used each time a property owner moves and establishes a new homestead, but the $500,000 cap remains.

If two persons are co-owners on a previous homestead property, but only one person moves to a new homestead property, can all of the SOH cap be transferred to the one owner?

  • No, because both co-owners of the previous homestead property are not taking title to the new homestead property, only 50% of the SOH cap can be transferred to the new homestead property.

If you have further general questions about homestead exemption and/or portability or want to discuss a specific question about portability, we encourage you to speak with your trusted real estate attorney.

Mallory Bauer, Esq.

Mallory Bauer, Esq.

Mallory practices in the areas of residential real property transactions and condominium development work, including but not limited to real estate closings, contract and lease preparation, negotiation, and seller financing.

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