Portability is one of the least known or understood benefits of the “Save Our Homes” Amendment in the State of Florida. It may be Florida’s best kept secret after our beautiful Florida springs. Before I dive into portability, let’s discuss the basics of Save our Homes benefits.
If you own a home in Florida that is your primary residence, you may qualify for the Florida Homestead Tax Exemption. The main requirements are that you have to 1) occupy the home by December 31st of the previous year, and 2) live in the home for 6 months of the year. You also have to file for the exemption by March 1st through your local Property Appraiser’s office. If you haven’t already, file an application before the March 1 deadline to capture this important tax benefit!
The Florida Homestead Exemption does a couple of really cool things. It puts a cap on annual property tax increases, which means that the municipality can’t increase the assessed value of your home by more than 3% per year. It also allows for up to a $50,000 exemption of the assessed value of your property. Now, when you sell your existing home and buy a new home, don’t look at the assessed value of the new home and assume that will be the same amount for you. The property appraisers office will often raise the assessed value of the new home closer to your purchase price. That is where Portability can come into play and be a huge tax benefit!
Portability allows you to transfer a portion of the 'Save Our Homes' benefit from a previous homestead to a new homestead to lower your assessed value.
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How does it work? If you qualify, you calculate the difference between the market value and the assessed value of your current homestead. If the value of your new home is more than your current home, the full amount is deducted from the new home’s market value and reduces the new home’s assessed value (the amount that is taxed). If the new home’s market value is less than the your current homestead, then you may still be able to apply a portion of that portability benefit towards your new home.
Take a look at this great graphic for some examples of how you might apply portability. Remember, the maximum amount that can be ported (transferred) is $500,000 of value (difference between Just/Market Value and Assessed Value).
Pro Tip: You have to apply for the portability benefit. It is not automatic!
As an example of portability, I will use my own situation. We sold our single family home in 2020 and purchased a condo that had a market value less than our previous home. The market value of our single-family home was about $150,000 more than the assessed value (the portability benefit). Part of the reason we had this much portability was because we had lived there for a while with a Homestead Exemption that kept the assessed value annual increases at no more than 3%, even though the market itself was increasing at a much higher rate. However, we downsized to a condo, so we were only able to “port” or move a portion of that amount to our new condo. Using the the calculations you see in the graphic above, we were able to port around $100,000 to our condo, which reduced the assessed (taxed) value. Then, we received a $50,000 Homestead Exemption which recused our taxable value even more.
Portability is a little known tax benefit that homeowners are not always prompted to apply for when filing a new homestead exemption. Make sure to take advantage of this Save Our Homes tax benefit when you file your Homestead Exemption (before March 1). For your convenience, below are some of Northeast Florida’s Property Appraiser Websites focusing on Homestead Exemptions, Portability, various other tax benefits, and the application process for each.
