Did you know Florida homeowners can transfer Save Our Homes savings when purchasing a new homestead property within the state?
In our blog, Florida Property Taxes Explained, we talk about the Florida Homestead and Save Our Homes (SOH) amendments. What we didn’t mention was that when you sell your primary Florida home and establish a new homestead property, you can transfer some of your SOH savings to your new property. Here’s how it works…
What is Portability?
Portability is the ability to transfer up to $500,000 of accumulated Save Our Homes assessment difference from a prior Florida homesteaded property to a new homesteaded property in Florida. This reduces the assessed value of your new homestead property, which reduces your taxable value and saves you money.
Example From Lee County
Our Lee County Property Appraiser site offers information on portability via this link. Below is an example of what portability might look like if the new home’s market value is the same or greater than the old home’s market value.
What If My “New Home” Costs Less?
If the new property’s market value is less than your prior property’s market value, the entire difference will not be applied, but rather the same percentage of difference. For example, if the old home’s Save Our Homes difference is 40% of its market value, the savings amount on the new property will be 40% of its market value.
Is There A Maximum Deduction?
Yes. The maximum amount that can be subtracted from the market value of a homesteader’s new home is $500,000. Here’s an example provided by Leepa.org.
Who Qualifies For Portability?
According to this FAQ document, “To qualify for portability, you must first establish your new homestead exemption and you had to have a homestead exemption on January 1 of either of the last three preceding years.”
Remember, your homestead exemption does not automatically transfer when you buy and sell property in Florida. For your new homestead property, you must apply for a new homestead exemption and also submit the portability application (DR-501T). For more information and to download the documents needed, visit Leepa’s website here.