The lack of a state income tax combined with the tropical climate and of course, freedom, have made The Sunshine State arguably the most popular state in the country. Whether it is simply as a vacation getaway or an ultimate relocation destination, Florida has posted historic numbers of visitors over the past year. For those that are opting to call Florida their primary residence, there are some property tax resources that should be taken advantage of.
Homestead Exemption
If your property is your permanent residence, or homestead, you may be eligible for a tax exemption. If your property is your permanent residence and you owned the property on January 1 of the tax year, then a $25,000 exemption is applied to the first $50,000 of your property’s assessed value. This exemption is applied to all taxes, including school district taxes. An additional exemption of up to $25,000 will be applied if your property’s assessed value is between at least $50,000 and $75,000. However, this additional exemption is not applied to school district taxes.
3% Save Our Homes Cap (SOH)
Perhaps the biggest property tax benefit for Florida homeowners is the Save Our Homes Cap (SOH). The 3% SOH Cap limits any increase to the assessed value of a homestead exempt property for tax purposes to a maximum of 3% each year or the amount of the change in the Consumer Price Index, whichever is lower. Upon a change of ownership, properties are assessed at the fair market value. During the first year of ownership, the Homestead Exemption should also be applied for. Once the exemption is applied for, the cap or base year is established and each year thereafter the SOH cap applies. The 3% SOH Cap remains in effect as long as the property is homestead exempt or until the property is sold.
Portability
One concern for homeowners thinking about selling their home and buying a new one is losing the accumulated tax savings over the years. The Portability provision of the SOH was created to address this. The portability provision of SOH allows you to transfer all or a significant portion of your tax benefit, up to $500,000, from a Florida home with a homestead exemption to a new home within the state of Florida that qualifies for a homestead exemption. It is important to remember that this provision applies when moving from a permanent residence to a new permanent residence within the state. Your local county property appraiser’s website should have a portability calculator that will allow you to determine hypothetical savings based on the property’s involved.
Summary
The Homestead Exemption is an important tool that all Florida residents that own a home should take advantage of. It is important to remember that this exemption must be applied for and is not automatically applied upon a home purchase. All homestead applications must be submitted by March 1st of each year. Are you considering buying and selling in South Florida? We can help. Contact Live South Florida Realty, Inc. today!
At Live South Florida Realty, Inc. we have assisted many clients with their real estate needs. Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. Live South Florida Realty, Inc., has been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our recently launched “Florida Home Search” app is now available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!
