Property Taxes in Florida
Florida’s property taxes are a primary source of revenue for local governments and are used to fund public services such as schools, libraries, and emergency services. Property taxes in Florida are assessed annually and are based on the property’s assessed value as determined by the county property appraiser.
Key Points:
- Assessment Value: The assessed value of a property is determined by the county property appraiser and is based on the market value of the property as of January 1st each year.
- Millage Rate: The tax rate, or millage rate, is expressed in mills per dollar of assessed value. One mill equals $1 of tax per $1,000 of assessed property value.
- Tax Calculation: Property taxes are calculated by multiplying the assessed value by the millage rate. For example, if your property is assessed at $200,000 and the millage rate is 20 mills, your property tax would be $4,000.
Use these calculators to estimate your property tax bill in Charlotte County and Sarasota County.
Homestead Exemption
The Florida Homestead Exemption is a significant benefit for homeowners. It provides a reduction in the assessed value of a primary residence, which in turn reduces the property taxes owed.
Key Points:
- Eligibility: To qualify for the homestead exemption, the property must be your permanent residence as of January 1st of the tax year, and you must apply for the exemption by March 1st.
- Exemption Amount: The homestead exemption can reduce the assessed value of your home by up to $50,000. The first $25,000 applies to all property taxes, including school district taxes. The additional $25,000 applies to the assessed value between $50,000 and $75,000 and does not apply to school district taxes.
- Additional Benefits: Certain groups, such as seniors, veterans, and disabled persons, may qualify for additional exemptions.
Save Our Homes Act
The Save Our Homes (SOH) Act is an amendment to the Florida Constitution that was approved by voters in 1992. It limits the annual increase in the assessed value of a homestead property, providing protection against rapidly rising property values and taxes.
Key Points:
- Assessment Cap: The SOH Act caps the annual increase in the assessed value of a homestead property to the lesser of 3% or the percentage change in the Consumer Price Index (CPI).
- Impact on Taxes: This cap helps homeowners by limiting the amount their property taxes can increase each year, providing predictability and stability in property tax bills.
- Portability: The SOH benefit is portable, meaning that if you move to a new homestead property within Florida, you can transfer your accumulated SOH benefit to your new property.
Portability of Homestead Exemption
Portability allows homeowners to transfer the SOH benefit from one homestead property to another within Florida. This can result in significant tax savings when moving to a new home.
Key Points:
- Eligibility: To be eligible for portability, you must establish a new homestead within two years of leaving your previous homestead.
- Transfer Amount: You can transfer the difference between the market value and the assessed value of your previous homestead to your new homestead, up to a maximum of $500,000.
- Application Process: To apply for portability, you need to submit Form DR-501T (Transfer of Homestead Assessment Difference) to the property appraiser in the county where your new homestead is located.
Practical Example
Let’s look at a practical example to illustrate how these benefits work together:
- Original Homestead:
- Market Value: $300,000
- Assessed Value (after SOH cap): $200,000
- Millage Rate: 20 mills
- Property Tax: $4,000
- Moving to a New Homestead:
- New Market Value: $400,000
- Transferable SOH Benefit: $100,000 (difference between original market value and assessed value)
- New Assessed Value: $300,000 (New Market Value – SOH Benefit)
- Millage Rate: 20 mills
- Property Tax: $6,000 (instead of $8,000 without portability)
By understanding Florida property taxes and utilizing the homestead exemption, the Save Our Homes Act, and portability, Florida homeowners can significantly reduce their property tax burden and enjoy greater financial stability.
Conclusion
Navigating property taxes, homestead exemptions, and portability in Florida can seem complex, but understanding these key concepts can lead to substantial savings. The homestead exemption provides immediate tax relief, while the Save Our Homes Act ensures long-term protection against rising property values. Portability allows you to carry these benefits with you, making homeownership in Florida even more attractive. If you have any questions or need assistance, consult with your local property appraiser’s office or a real estate professional who can guide you through the process.
For those of you looking to buy or sell property in Southwest Florida, don’t hesitate to reach out. I’m here to help you navigate the real estate market and take full advantage of these valuable benefits.
