A previous blog post discussed Florida Homestead and Save Our Homes laws. This discussion details what steps you should take to reduce your property tax when you sell your Florida home (or no longer claim it as your primary residence) and buy or declare another Florida home as your primary residence. You must act within 3 years of changing homes to take advantage of the portability savings.
You might want to take a moment to look at your property record. If you're in Broward County, go to bcpa.net, otherwise do an internet search for <your county> property appraiser office and search by address for your property. I expect all the counties will appear similar to Broward.
In the left-hand column there are three rows labeled Just Value, Portability, and Assessed/SOH.
- Just value is the market value of your home based on your annual county appraisal. This market value may be quite different from the sale price. County appraisers base their value on what is typical for the neighborhood.
- Portability will be 0 except for the first year in which you received your new homestead exemption and "ported" your savings to the new property.
- Assessed/SOH value is the tax basis for the home (1st year of filing: purchase price - homestead exemptions = Assessed Value). If you never filed for homestead, then Just Value = Assessed/SOH value and you have no savings to transfer. Too bad. Live and learn. (SOH stands for Save Our Homes which is a rule that caps assessed value increases to 3% per year for homesteaded properties)
Okay, I hope everything is reasonably clear at this point. So, how much money can you save on your new property taxes? The calculations are easy.
- If you're upsizing, Just Value of sold home minus Assessed Value of sold home = Portability amount (up to a maximum of $500,000).
- If you're downsizing, use 80% of that calculated portability amount.
- For new residence's first year of homesteading: purchase price minus portability amount minus homestead exemptions = assessed value.
- Calculations may differ in divorce cases and partial ownerships.
IMPORTANT: WHEN FILING FOR HOMESTEAD ON NEW PROPERTY YOU MUST ALSO FILE FOR PORTABILITY.