An Explanation of Florida’s Property Tax Portability Exemption
The other night some friends were wondering aloud how they could afford to move into a nice condo and sell their home in Pinecrest. They assumed that since they had lived in their home so long and their tax base was so low because of the Save Our Homes ammendment, that the taxes on a new purchase would make the new move just too expensive. So we started to talk about the Florida Portability Exemption. I don't think I explained it to well as I should have as I was rusty on the thought. I did some homework and have decided to share the information with everyone. I think you will find it interesting and find that it is possible to either "Move Up" into a condo after selling your Pinecrest, Coral Gables or Palmetto Bay home, or "Move Down" into a condo after selling.
Property tax savings portability (money saved over time on property taxes because of yearly increase limits through Florida’s Save Our Homes amendment) applies to homeowners with homestead exemption moving anywhere within Florida.
Up to $500,000 of Homestead Assessment Difference can be transferred when one home is sold and another is purchased. Homeowners have two years after they sell a home to buy a new one and transfer the savings.
Example of buying a MORE Expensive home:
John currently owns a home and has lived there for a long time. The home’s just value (market value) is $500,000, but because of Save Our Homes, the assessed value is only $200,000. John buys a new home for $700,000. The following year, he will pay taxes on only $400,000, because he is “porting” $300,000 in reduced taxable value from his previous home. After factoring in the new homestead exemption of $50,000, his total assessed value will be $350,000.
If buying a less expensive home, the calculation changes and is based on the percentage of tax savings rather than a dollar amount. For example, if the assessed value on the original home was 50 percent of the just value, the homesteader would transfer that percentage to the new home. The new assessed value will be 50 percent of the new home’s just value. The percentage system was created to keep homesteaders from the possibility paying no property taxes at all, by moving from a high-cost area of Florida to a low-cost area – a change that could severely hurt smaller rural economies.
Example of buying a LESS Expensive home:
John currently owns a home and has lived there for a long time. The home’s market value is $500,000, but because of Save Our Homes, the assessed value is only $200,000. John buys a new home for $300,000. He will pay taxes only on $120,000 because when buying down in value, he will keep the same ratio (40 percent) of assessed value to market value that he enjoyed in his old home. After factoring in the new homestead exemption of $50,000, his total assessed value will be $70,000.
Feel free to call or email me to discuss this further if you like. Here are some links that might prove helpful for doing the math on your own Portability Exemption.
Property Tax Search
Tax Millage Rates and Estimator
Lynn Cromer is a real estate sales and marketing professional for Coldwell Banker in beautiful Pinecrest, Florida. For more information on Pinecrest, Florida or the communities of Coral Gables, Palmetto Bay and Coconut Grove, she can be reached at 305-962-4068, by email at Lynn@LynnCromer.com or online at www.LynnCromer.com