The State of Florida truly is a wonderful place to live, especially if you consider the property tax savings that you can take advantage of. As a homeowner and resident of Florida, two important tax saving mechanisms are available to you.
1) Homestead Exemption (HEX)
2) “Save Our Homes”
Homestead exemption is pretty straightforward. As long as you own the home and it is your primary residence, you are entitled to $50,000 worth of property tax exemption from all taxing authorities except School Board taxes (which stops at $25,000 of exemption). You do need to apply for the exemption and can then place yourself on auto-renewal thereafter. The full details can be found on the Miami-Dade Government website.
The “Save Our Homes” program is far more complex and therefore is generally less understood. “Save Our Homes” is further divided into parts: ”Amendment 10“ and the “Homestead Assessment Difference” (or portability). Complete info available here.
With “Save Our Homes”, primary residences’ assessed values can only increase 3% a year or the CPI (consumer price index), whichever is less. The longer you stay in your owned home, the more likely you are to build a fair amount of tax-saving equity. For example, if you have been in a home for 10 years, you are only paying 30% more in ad valorem-based taxes than during the first year even if your home’s assessed value were to double.
This can add up to some nice savings that you wouldn’t want to lose. For this very reason, in 2008, an amendment was added to allow for portability of the “Save Our Homes” benefits. “Save Our Homes” Portability allows you to take with you up to $400,000 in value protection from property taxation to your NEW homestead property or 50% (if you are downsizing – see below).
UPSIZED PROPERTY
Prior Home with “Save Our Homes” Protection
Market Value: $250,000
Assessed Value: $125,000
***Savings you take with you: $125,000
NEW Home with “Save Our Homes” Portability
Market Value: $350,000
Savings Carried from Old Property: $125,000
New Home Assessed Value: $225,000 (350k – 125k)
SAVINGS: $125,000 IN VALUE SHIELDED BY PORTABILITY!
DOWNSIZED PROPERTY
Prior Home with “Save Our Homes” Protection
Market Value: $250,000
Assessed Value: $125,000
Savings you take with you: $125,000 (250k – 125k)
NEW Home with “Save Our Homes” Portability
Market Value: $225,000
Savings Carried from Old Property: $112,500*
New Home Assessed Value: $112,500 (225k – 112,500)
SAVINGS: $112,500 IN VALUE SHIELDED BY PORTABILITY!
* Savings capped exceed 50% of New Property Market Value. $125,000 to carry over is greater than 50% of the $225,000 Market Value of the New property which is $112,500. Portability allowed amount = $112,500
SAVINGS: $112,500 IN VALUE SHIELDED BY PORTABILITY!
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