With one of the most competitive housing markets nationwide, Florida also offers one of the most valuable property tax benefits in the country — and most new buyers either don’t know about it or miss the deadline to apply.
The Florida Homestead Exemption can reduce your taxable property value by up to $50,000 and cap how much your assessed value can increase each year. We explain what you need to do after closing so you don’t miss any important deadlines by mistake.
The Florida homestead exemption is a property tax benefit that reduces the assessed value of your primary residence by up to $50,000 for property tax purposes.
As explained by the Florida Department of Revenue, this exception, along with the Save Our Homes assessment limitation, helps thousands of Florida residents save money on their property taxes every year, with additional benefits available for homeowners with disabilities, senior citizens, veterans, disabled first respondents, among others.
If you legally own a house in Florida by January 1, with this property being your primary residence, you qualify for homestead exemption.
If, for example, your home is worth $800,000, your property taxes are based on an assessed value of $750,000. The amount you cut from your tax bill will depend on local millage rates, but it still results in meaningful annual savings. In Miami-Dade, it can represent $800–$1,200+ saved on property taxes per year.
As an additional benefit to the homestead exemption, the Save Our Homes cap limits how much the assessed value of a homesteaded property can increase each year. The increase is capped at 3% or the change in the Consumer Price Index, whichever is lower.
In a hot market like Miami, where property values can jump 10–15% in a year, this cap is enormously valuable over time. For example, if your home’s market value increases 12% and the property is already claimed for homestead exemption, your assessed value only increases 3%. You can make a big difference in your yearly tax bill while creating a significant gap between the property’s market value and the assessed value.
The cap resets when you sell the property, so the new buyer’s assessed value is based on current market value at purchase. That, however, leads us to another important perk for long-term residents: the Portability transfer.
Basically, if you had a homestead in any part of the state within the last three years and that property was already under the homestead exemption, you can transfer the accumulated Save Our Homes benefit to your new home. The portability amount can go up to $500,000, but only if you apply for it. You need to fill out form DR-501T and send it as part of your new homestead exemption application. From there, the Property Appraiser will define the assessment difference.
It’s important to have all the information in advance, especially for first-time buyers. If this is your first closing or if you’ve recently moved into the state, it’s easy to miss the deadline and lose a full year’s worth of savings in the process.
Once you’ve purchased a Florida real estate property, there’s three major factors to keep in mind:
If the property you own in Florida serves as a rental, an investment property, a vacation home, or any other commercial purpose, it’s not eligible for homestead exemption. This means that you can’t qualify if the property has been rented for more than 30 days in a given calendar year.
If you meet all these requirements, then all you need is your basic ID documentation to complete the application: Your Florida driver’s license or ID with new address, Florida vehicle registration, voter registration (if applicable), and Social Security number. Of course, you will only get approval if you do it within the correct timeline.
You can file for the homestead exemption at your county Property Appraiser’s office by mail or in person. Offices in Miami-Dade, Broward, and Palm Beach also offer online applications, which can save you a lot of time.
Key Title & Escrow Tells You All You Need to Know About Florida Homestead Exemption You won’t have to worry about being in the dark about Florida homestead exemption when you work with Key Title & Escrow. As part of our Residential Closing Services, we provide all the information buyers need to make their best of their time after closing. You’ll learn about the annual savings you can get with this tax benefit, the deadline to apply, and the portability benefits for repeat buyers.
We specialize at providing up-to-date resources while tailoring our services to what you need, so this is one of dozens of details an experienced closing team covers. We don’t stop at completing the steps leading up to closing; you can also count on us to give you timely guidance and useful information to help you protect your investment.
Getting the keys is just the beginning! make sure to work with a reliable title company so you don’t miss all the benefits of purchasing a new Florida home. Key Title & Escrow has answers for all your questions, so feel free to contact us at any time to learn about Florida exemptions and other parts of the closing process!
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