SAVE OUR HOMES-HOMESTEAD PORTABILITY
Table of Content
In Duval County alone, Save Our Homes is shielding $5.8 billion of homestead property value from taxation this year, compared to $1.9 billion three years ago. The removal of $5.8 billion in homestead value translates to a $66 million loss in tax revenue for the city of Jacksonville and almost $40 million for the school district. You as the homestead owner must have beneficial or equitable title to real property.
In the Base Year the law requires that the Assessed Value equal the Market Value. Do I have to sell my home before I can qualify for portability? No, you only need to abandon your existing homestead, meaning you may still own the property but no longer receive an exemption on the property for the year you are attempting to get portability.
Portability
The laws cover real estate taxes, creditor protection and distribution to your heirs. They protect properties up to 160 acres outside of a municipality and up to a 1/2 acre within a municipality. The base year is the year in which the property owner qualifies and receives their homestead exemption. Future increases in assessed value are then capped at the lesser of 3% or the CPI. A provision of the Save Our Homes Amendment to the Florida Constitution allows homestead property owners to port, or transfer, the accumulated difference between assessed value and the just/market value. The process of moving this SOH differential from one property to another is referred to as Portability.
But, Florida law provides that the property must be reassessed at full market value in the year following the sale. First, it’s important to understand the benefit only applies to real estate taxes not capital gains taxes. In order to qualify for Save Our Homes, you must have received the Homestead Exemption on your home. The Homestead Exemption is generally for a primary residence and provides additional tax benefits. Save Our Homes limits the increase in your property’s appraised tax value each year.
Exemptions & Save Our Homes
This can usually be easily fixed and doing so will not raise the tax bill for the year of sale, or for subsequent years for the new buyer. Gulliford said raising the maximum cap for how much assessed values can rise each year might be reasonable. City Council member Lori Boyer also is in the top tier of Save Our Homes beneficiaries. The property appraiser pegs the market value of her River Road home in San Marco at about $3.53 million, but Save Our Homes results in an assessed value of $1.76 million. The largest Save Our Homes break in Duval County for the 2016 tax year is for riverfront property at 900 Brookwood Road.
Thus, it is not an annual increase on the amount of taxes paid. Amendment 10 of 1992, a citizen initiative known as the "Save Our Homes Amendment", limited homestead property valuation increases for homes receiving a homestead exemption to a maximum of 3% annually. The difference between the just value and the assessed value is referred to as the Save Our Homes benefit. Prior to the Save Our Homes Benefit being portable, when a homestead property was sold, the Save Our Homes assessed value would return to market value the year following the sale.
Florida’s Homestead Tax Exemption and Save Our Homes Provision
If the new owner is your spouse, or someone who is legally or naturally dependent on you, he or she must apply for homestead exemption. All persons entitled to a homestead exemption under Section 6 of this Article shall have their homestead assessed at just value as of January 1 of the year following the effective date of this amendment. This assessment shall change only as provided in this subsection. Only that portion of the property receiving homestead exemption is subject to the assessment limitation. The remainder of the property is assessed at full market value under the law.
The Duval County Property Appraiser’s Office pegs the market value at about $6.8 million, but the assessed value for tax purposes is $2.8 million. The home sold during 2016 so it will reset to the higher value when next year’s tax bills go out. Meet the "Marketing Megaphone" and Webmaster behind McCallion & McCallion.
Exemptions Department
Do I have to purchase a new property to get the portability benefit? No, if you already own another property (2nd home, beach house, etc.) you can abandon the homestead from the old property and apply for homestead and the portability benefit on the new property. In these cases, it is necessary for the applicant to furnish this office with a copy of the entire trust agreement or a recorded memorandum of trust. Florida law specifies those situations under which the resident may obtain homestead exemption. The Florida Constitution requires that the homestead claimant have a legal title or beneficial title in equity to the property. For a homeowner to receive the exemption on their new home, they must qualify and apply either online or in person at the Property Appraiser’s office by the March 1 deadline.
The cap remains in effect upon the change of title due to divorce or death of a spouse as long as the remaining owner continues to live on the property as their permanent address. There is no guarantee your taxes will reduce due to the 10% assessment cap, as many other factors are involved such as tax rates and non-ad valorem assessments, neither of which are determined by the Property Appraiser. All properties that DO NOT have a homestead exemption, such as 2nd homes, rental properties, vacation homes, vacant land or commercial property. And for homeowners that are fortunate to be in a fair financial situation and with this being a buyer’s market, the Save Our Homes portability is a great motivation for them to purchase a new home. As a result, the portability of the Save Our Homes benefit will stimulate the market, motivate Floridians to purchase new homes and assist in the housing market recovery. Your assessed value will still increase 3% of $125,000, or $3,750, to $128,750.
You currently own homestead property with a just value of $250,000 and an assessed value of $200,000, thereby providing a $50,000 assessment difference. You then purchase a new homestead property with a just value of $300,000. Because the assessment difference on the previous homestead is $50,000, the new homestead assessed value is $250,000.
It doesn’t matter if inflation is higher, because your appraised value can never increase by more than 3% if nothing changes but the market value of your home. Let’s say you have a $100,000 house and there was 2% inflation last year.The property appraiser says your house now appraises at $105,000. The Edwards family did missionary work in Turkey for many years before moving to Florida in 2019. They settled in a newly-built community located about an hour’s drive from Orlando. In September 2020, federal agents showed up at the home to execute a search warrant but no one was there and the place had been “cleared out,” according to the civil forfeiture complaint. The case dates back to April 2020 when Josh Edwards applied for a $6 million Paycheck Protection Program loan to cover payroll, rent and utilities for his family’s ministry.
In addition, on multi-dwelling/agricultural parcels only the homesteaded portion is subject to the SOH limitation. If you sell your current home and move to another, you can take most, if not all of the savings with you – up to $500,000! If your new home has a higher just value than your former home, the portability amount is determined by subtracting the assessed value of the former home from its just value .
The added $25,000 applies to assessed value over $50,000 and only to non-school taxes. Nearly every property in our area would qualify for both based on current values. Application for the homestead tax exemption must be made with your local property appraiser by March 1 of the tax year you are applying for. Property owners in Florida may be eligible for exemptions and additional benefits that can reduce their property tax liability. The homestead exemption and Save Our Homes assessment limitation help thousands of Florida homeowners save money on their property taxes every year.
Homestead Tax Exemption
The limitation will be applied to the assessed value in the first year following the year in which the new owner qualifies the property for homestead exemption. For example, Property A's market value increases by 10% this year. As a homestead property, the property appraiser can only increase its value by 3%, or CPI, whichever is less, under the SOH limitation. Since its assessed value under the limitation remains under market value, the property appraiser must increase the assessed value by 3%, or CPI, to bring its value closer to market value.
Comments
Post a Comment