Florida Property Tax Portability Explained
So just what is Property Tax Portability? Recent Florida legislation allows residents that are moving from one primary residence to another to bring the accrued property tax savings on the taxable value of their existing homestead property with them to their new primary residence. This can mean up to a $500,000 decrease in the taxable value of the new home, which translates into a significantly lower property tax bill. Under the old "Save Our Homes" legislation, Florida homestead residences are protected to a maximum 3 percent increase in the assessed value each year. Without the portability provision, if you moved from one homestead to a new one, you lost all of the assessed value savings created by Save Our Homes and your new home was assessed at current market value. The Portability Amendment makes that accrued tax savings "portable" so you can transfer up to $500,000 of your accrued Save Our Homes benefit to your new home. EXAMPLE: You sell your current Florida Homestead that has an Assessed Value of $200,000 and a Just (Market) Value of $350,000. $350,000 – $200,000 = $150,000 in Tax Benefit. You buy a new home for $400,000. The $150,000 SOH tax benefit is applied to the new homes Just (Market) Value to creates a lower Assessed Value. So if you own a home in Florida and are considering buying a new home while market prices are at historical lows, a dramatic change in property taxes may not be something to influence your decision. Homeowners who sell one home in order to move into another full time, will find that the taxes on their new property are adjusted to reflect the savings from their old home.