Homestead portability refers to the ability of homeowners in Florida to transfer the accumulated Save Our Homes benefit from their current property to a new property within the state. Save Our Homes limits the annual increase in the assessed value of homestead property to no more than 3% or the Consumer Price Index, whichever is lower.
With homestead portability, homeowners who sell their current homestead property and purchase a new one within the state of Florida can transfer their accumulated Save Our Homes benefit to the new property. This can result in significant savings for homeowners, especially if they are moving to more expensive properties.
For example, if a homeowner has owned their current homestead property for many years and the property's assessed value has increased substantially, the homeowner may have accumulated a large Save Our Homes benefit. If the homeowner then sells their current property and purchases a more expensive property, they can transfer the accumulated Save Our Homes benefit to the new property, which can markedly reduce the property taxes on the new property.
Here are the steps to follow to calculate homestead portability:
1) Determine your current Save Our Homes benefit: This is the difference between your property's market value and its assessed value for property tax purposes, up to a maximum of $500,000. For example, if your property's market value is $600,000 and its assessed value is $200,000, your Save Our Homes benefit is $400,000.
2) Calculate the cap on your Save Our Homes benefit: This is the maximum amount of your Save Our Homes benefit that you can transfer to a new property. The cap is determined by taking the assessed value of your current property and multiplying it by the percentage increase in the Consumer Price Index since your last assessment. For example, if your current property's assessed value is $200,000 and the CPI has increased by 20% since your last assessment, your cap would be $240,000 (i.e., $200,000 x 1.20).
3) Determine the assessed value of your new property: This is the value that will be used to calculate your property taxes. The assessed value is typically a percentage of the property's market value.
4) Calculate your new Save Our Homes benefit: This is the difference between the assessed value of your new property and the cap on your Save Our Homes benefit. For example, if the assessed value of your new property is $500,000 and your cap is $240,000, your new Save Our Homes benefit would be $260,000.
5) Calculate your property tax savings: This is the difference between the property taxes you would pay with and without your Save Our Homes benefit. For example, if your property tax rate is 1.5% and your new Save Our Homes benefit is $260,000, your annual property tax savings would be $3,900 (i.e., $260,000 x 1.5%).
With homestead portability, homeowners who sell their current homestead property and purchase a new one within the state of Florida can transfer their accumulated Save Our Homes benefit to the new property. This can result in significant savings for homeowners, especially if they are moving to more expensive properties.
For example, if a homeowner has owned their current homestead property for many years and the property's assessed value has increased substantially, the homeowner may have accumulated a large Save Our Homes benefit. If the homeowner then sells their current property and purchases a more expensive property, they can transfer the accumulated Save Our Homes benefit to the new property, which can markedly reduce the property taxes on the new property.
Here are the steps to follow to calculate homestead portability:
1) Determine your current Save Our Homes benefit: This is the difference between your property's market value and its assessed value for property tax purposes, up to a maximum of $500,000. For example, if your property's market value is $600,000 and its assessed value is $200,000, your Save Our Homes benefit is $400,000.
2) Calculate the cap on your Save Our Homes benefit: This is the maximum amount of your Save Our Homes benefit that you can transfer to a new property. The cap is determined by taking the assessed value of your current property and multiplying it by the percentage increase in the Consumer Price Index since your last assessment. For example, if your current property's assessed value is $200,000 and the CPI has increased by 20% since your last assessment, your cap would be $240,000 (i.e., $200,000 x 1.20).
3) Determine the assessed value of your new property: This is the value that will be used to calculate your property taxes. The assessed value is typically a percentage of the property's market value.
4) Calculate your new Save Our Homes benefit: This is the difference between the assessed value of your new property and the cap on your Save Our Homes benefit. For example, if the assessed value of your new property is $500,000 and your cap is $240,000, your new Save Our Homes benefit would be $260,000.
5) Calculate your property tax savings: This is the difference between the property taxes you would pay with and without your Save Our Homes benefit. For example, if your property tax rate is 1.5% and your new Save Our Homes benefit is $260,000, your annual property tax savings would be $3,900 (i.e., $260,000 x 1.5%).
There are additional factors that can affect your homestead portability calculation, such as the timing of your property sales and purchases and any changes in the CPI. The county property appraiser's office can provide more guidance. Contact Anna today, and let her expertise guide you.
Resources:
Alachua County Property Appraiser
Alachua County Tax Bill Estimator
