Have you taken advantage of the Homestead Portability tax exemption?
In Florida, the Save Our Homes Amendment to the Florida Constitution prevents the assessed value of homestead property from increasing more than 3% per year, or the percent change in the Consumer Price Index, whichever is lower. Since an amendment to the Florida Constitution in 2008, Florida homeowners have had the ability to “port” their accumulated homestead exemption tax savings from their current house to their new home, although many people fail to take advantage of this benefit.
In a nutshell, a homeowner may “port” their homestead tax benefits to their new primary residence so long as they establish their new homestead within two years of selling (abandoning) their previous homestead. If the new homestead is more valuable than the old homestead, the homeowner may port up to $500,000 of capped value to their new homestead. If you are downsizing, the amount of your homestead tax benefit that you may port will be limited to your old home’s assessed value divided by its just value. A really helpful chart which tries to simply the math on portability has been published by the Hillsborough County Property Appraiser.
In order to port your benefits from your old home to your new home you will have to file a Transfer of Homestead Assessment Difference using form DR-501T. Much like your regular homestead exemption this must be filed by March 1st of the year in which you are establishing your new homestead. If you have questions on filing for homestead generally check out my previous blog on the Homestead Exemption.
One of the most frequently asked questions concerning portability concerns how this works if two people who each had their own homesteads get married and are acquiring a new homestead together? The answer is actually pretty straight forward . . . the Property Appraiser will use whichever of the prior homesteads would result in the highest tax savings, but not exceeding the $500,000 cap discussed above.
If you or your clients have any additional questions about Florida Homestead or the ability to port benefits from a prior homestead, email me at Brian@AllPropertyTitle.com.
