Florida's Homestead and Taxes
What is a the Florida Homestead Exemption?
Florida's constitution provides relief from property taxes for qualified permanent residents who own their home. To qualify in any given year, the homeowner must reside in their home on January 1st and apply by March 1st. When qualified, the homeowner will be granted a $25,000 exemption from their home's assessed value. Taxes will be levied on the remaining balance. It the home assessed value is over $75,000 another $25,000 will be deducted, however, the second $25,000 is not exempt from school district tax levies. Homeowners granted Florida's Homestead Exemption also automatically receive the Save Our Homes benefit. See more about Florida's Homestead Exemption here.
Save Our Homes
Save Our Homes limits any increase in assessed value of homesteaded properties to 3%, or the change in the Consumer Price Index, whichever is less. This benefit begins in the second consecutive year after qualifying for the Homestead Exemption. When a homesteaded property is sold or conveyed to a new owner, the assessed value returns to fair market (or just) value in the year following the sale. Homeowners who qualify for the Homestead Exemption can transfer their Save Our Homes benefit to their next property provided that it is homesteaded within 2 years. The protection from escalating property taxes offered by the Save Our Homes cap is a significant tax break for Florida homeowners and is one of the most valuable rights available to Florida homeowners.
Changes, additions or improvements to the homestead property
New improvements or additions are assessed at full market value as of January 1 of the year after the construction is substantially completed. After the first year the additions and or improvements are subject to the Save Our Homes cap.
Buying a Home in Florida
When buying a home in Florida for the first time, you need to be aware of how Florida's Homestead Exemption affects the taxes that are quoted on the listing sheet or page. You need to keep in mind that those quotes are virtually useless to you if the property has been homesteaded by the owner. When a home changes ownership, the cap and exemption are removed at the end of the calendar year and taxes are then calculated on the current market or just value. It is important to be aware, when purchasing a a homestead property in Florida, especially one that increased in value, that the taxes may increase significantly the next year. The increase due to the removal of the cap may double or even triple taxes, depending on how long the previous owner had homestead exemption and if property values had significantly increased over that period. Additionally, the property will qualify for the Save Our Homes benefit the second year of the new owner's Homestead Exemption. Therefore, if a property owner applies for and receives Florida's Homestead Exemption for 2015, the assessed value cap won't begin until 2016. If additions or improvements are made to the property, the value of those improvements will be added to the roll regardless of the cap. For example, if a pool is added to a property, the value can increase no more than the cap rate, plus the value of the pool. If we correct such items as size, number of bathroom fixtures, installation of heat and/or air conditioning, the value of those corrections will also be added to the roll above the cap. To help you to determine an estimate of property taxes in Palm Beach County with and without Florida's Homestead Exemption, go to http://www.pbcgov.com/papa/ and find the property you wish to purchase via owner name, address or parcel number. Scroll down until you see the Tax Calculator button. Click and follow the instructions.
Current Homesteaded Property and Portability
Homestead property owners are able to transfer their Save Our Homes benefit to a new homestead within two years of giving up their previous homestead. If the market (or just) value of the new homestead is more than the previous home's just value, the entire cap value can be transferred up to $500,000. If the new homestead has a lower just value, the percentage of the accumulated benefit may be transferred to the new homestead. Homeowners may transfer their Save Our Homes benefit to a new homestead anywhere in Florida within two years of leaving their former homestead. The new homestead must be established by January 1. For example, if you moved during 2015, the exemption remains on your home until December 31, 2015. You have until January 1, 2017 to qualify for a new exemption and port the benefit to a new homestead. The portability application must be made by March 1 of that year. Those who own another property in Florida can remove the homestead from one property and apply it to the other. The same rules apply. If your homesteaded property is in Palm Beach County you can find out how much can be transfered to your new homestead. Just enter your address in the Address field here. Find the Calculate Portability and follow the instructions. http://www.co.palm-beach.fl.us/papa/portability.htm Martin County Homestead Exemption Application [simple-social-share]