For those who have made a home in Florida and are considering a move to a new Florida home, one of the most important things to be aware of is the newly enacted Property Tax Portability Amendment which impacts Homestead property.
So just what is Florida Property Tax Portability?
A new Florida law allows residents that are moving from one primary residence to another to bring the built-up property tax benefits on the assessed value of their existing home along with them to their new home. This can mean up to a $500,000 decrease in the taxable value of the new home, and a huge annual property tax savings.
Florida primary residences are protected to a maximum percent increase in the assessed value each year by homestead legislation known as “Save Our Homes”.
Without the portability provision, if you moved 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 literally made that tax savings “portable” so you can now 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 looking into downsizing to a condo or if you have been living inland and want to take advantage of the great waterfront property prices on the coast, a dramatic change in property taxes may not be something to worry about. Those 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.