Homestead exemption and portability: Ways to save on your property taxes
The Florida Homestead Exemption is intended to give homeowners in the Sunshine State a significant reduction on the real estate taxes on their primary domicile. It is a windfall that should not be ignored as it takes just a small amount of paperwork on the part of the homeowner to take full advantage of it. Here is a quick rundown on what you need to know.
What exactly is a homestead exemption?
In the simplest terms, a homestead exemption allows a homeowner to reduce the taxable assessment of their primary domicile and thus pay a reduced amount of real estate taxes on that residence. The original Florida homestead exemption law was passed by the legislature over 80 years ago. The original exemption amount was $5,000 and it has been regularly increased over the years to keep pace with inflation and rising housing prices.
These days, the standard deduction is $50,000. On a $500,00 home, that is a savings of 10 percent – a greater percentage for less expensive homes! – just for filing a form. Even more good news is possibly on the way. In November of 2018, a new amendment was introduced to the Florida legislature that would increase the standard homestead deduction from $50,000 to $75,000. In addition to the standard exemption, other smaller ones exist for those homeowners who are:
- a widow or widower
- provide living space for parents or grandparents
- physically disabled
- over the age of 65
- are a disabled veteran
- actively deployed in the military
What is the portability provision?
In June, 2008, the legislature and voters of Florida approved the “Save Our Homes” Amendment to the state’s constitution. This provision limited the amount that the assessed value of a Florida home could rise to 3% – even if the property increased in value far beyond that amount. This provision is a major benefit to homeowners seeking to reduce their real estate taxes and accrues over time. The portability aspect of the provision allows a homeowner to transfer this accrued benefit to a new home if they make it their primary domicile. The savings can be immediate and then potentially enormous as the years pass by.
For more detailed information on your homestead exemption and its portability to your next home, please contact us at All Property Title. We can be found online at www.allpropertytitle.com or reached directly at 954.753.5313.