In 1995 the Save Our Homes (“SOH”) Amendment was adopted by Florida voters to create a limitation on the amount a home can be assessed. For example, after the first year a home receives a homestead exemption and the property appraiser assesses it at just value, the amount the assessment can increase for each following year cannot be more than 3% or the percent change in the Consumer Price Index (CPI), whichever is less. Below is a chart that reflects the last 7 years of CPI
Changes and Caps in Sarasota County:
|Save Our Homes Annual Increase*|
In 2008, Florida voters adopted a constitutional amendment (i.e., Amendment 1 aka “Portability Amendment”) which granted added tax relief to homesteaded property owners. The amendment gives homesteaded owners the ability to transfer some or all of their SOH benefits to a new homesteaded property. The accumulated difference between your assessed value and the just market value is your “SOH benefit”. Although the initial intent of the SOH Amendment was to allow homeowners the ability to stay in their homes when values were rising it also had a side effect – it discouraged homeowners from moving to a new residence for fear of giving up all their accumulated property tax savings.
Example: You sell your current Florida Homestead Property that has a Just (Market) Value of $400,000 and an Assessed Value of $300,000 ($400,000 – $300,000 = $100,000 in SOH benefit). You buy a new home for $400,000. The $100,000 SOH benefit is applied to the new homes Just (Market) Value to create a lower Assessed Value.
The rules regarding portability are set forth in Section 193.155(8), Florida Statutes. Essentially, a homeowner may “port” their SOH benefit to their new home as long as they establish their new homestead within two (2) years of abandoning their previous homestead. Note there are different limitations and restrictions on your ability to port. As always, if you have any questions concerning the foregoing, we urge you to consult with your real estate attorney.
This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
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