| Florida's real estate tax laws can be tricky | | | | not a Florida resident and it is not your |
| to understand. There are several factors | | | | primary residence, SOH won't apply to your |
| which affect the size of your property tax | | | | purchase. The assessed value cap is lifted |
| bill, so if you're buying property in Florida | | | | automatically when the property changes |
| or are relocating, it's important to | | | | hands. It is important for new home buyers to |
| understand how taxes are calculated. | | | | rely on the current market value and not on |
| | | | the previous owners tax assessment as it is |
| Property values are in constant flux just as | | | | likely that the home will have an |
| the real estate market is, so getting an | | | | artificially low assessed value, especially |
| accurate, current assessment is important. | | | | if it's been owned by the same person for a |
| The assessed value of the property you buy | | | | number of years. |
| may change dramatically when it changes | | | | |
| hands, so it's good to be aware of the | | | | Once you buy a home, you can apply for |
| factors that might influence how much tax you | | | | homestead exemption, and receive automatic |
| pay. | | | | SOH protection once the exemption is approved |
| | | | for the next tax year. |
| As well as market rates your real estate tax | | | | |
| bill will also depend on the tax rate for | | | | What does that mean? If you buy your home |
| different local government bodies. The | | | | prior to December 31, 2008, you will have the |
| property you buy will be subject to taxes | | | | benefit of whatever the prior homestead |
| from several different bodies, including | | | | status is for your bill that tax year. Once |
| county and city government, the school board, | | | | the new year begins and providing you have |
| hospital district, and water district. There | | | | applied by March 31, your new Homestead |
| may be additional taxes if you live in a | | | | exemptions will be reflected in the following |
| masterplanned community. | | | | November's 2009 tax bill. Remember taxes are |
| | | | paid in arrears. |
| On the other side of the coin, homestead | | | | |
| exemptions and the "Save our Homes" amendment | | | | "Save Our Homes" Portability |
| help limit the amount of your property tax | | | | |
| bill. | | | | Amendment 1 has also changed the way SOH |
| | | | works. Under Amendment 1, SOH protection now |
| County Taxes | | | | has "portability," meaning you can transfer a |
| | | | portion of your SOH benefit to a new |
| The amount you pay in county property taxes | | | | homestead, if you meet the qualifying |
| will, of course, vary depending on the value | | | | criteria. |
| of your property. However, they'll also vary | | | | |
| depending on the tax rate in your county, and | | | | Â |
| where in the county you live. This is because | | | | |
| within a county, some regions are | | | | Under the old pre-Amendment 1 system, a |
| incorporated and some are unincorporated, and | | | | homeowner who had lived in the same homestead |
| unincorporated regions tend to have lower | | | | for several years had a substantial property |
| property taxes. If you live in Temple | | | | tax benefit, as their home's assessed value |
| Terrace, some areas of New Tampa or the City | | | | was capped. However, while they would enjoy |
| of Tampa, for example, you'll likely be | | | | lower property taxes, they were also more or |
| paying more in property taxes than someone | | | | less trapped in that home, as moving to a new |
| living in Lutz or some portions of New Tampa, | | | | homestead would mean a sharp increase in |
| as the former locations are incorporated and | | | | property taxes (as they would not be |
| the latter are not. Unincorporated areas | | | | protected by SOH). |
| generally are lower because they do not have | | | | |
| "city" taxes. | | | | Amendment 1 has changed that by allowing |
| | | | Florida homeowners who receive SOH protection |
| Community Development District Tax | | | | to transfer that protection to a new |
| | | | homestead. They must, however, apply for SOH |
| People living in a Florida masterplanned | | | | within two years of purchasing the new |
| community or community development district | | | | property to be eligible to transfer the |
| will likely have additional taxes to pay. | | | | accumulated tax benefit to the new home. For |
| These extra taxes are what enable the | | | | example, a homeowner who gave up their old |
| developers of these communities to add extra | | | | homestead after January 1, 2007, would have |
| amenities to enhance the lives of residents. | | | | to claim for their new homestead by March 3, |
| By sharing the cost of community and land | | | | 2008 to be eligible for SOH portability. |
| development among residents, additional | | | | |
| facilities such as recreation centers, parks, | | | | The protection isn't limited only to people |
| walking trails, and sports facilities can be | | | | who purchase new property. A Florida |
| added. | | | | homeowner with multiple properties can |
| | | | transfer homestead status and SOH protection |
| Depending on the community, the tax may have | | | | from one property to the other. However, |
| two separate parts. One is a fixed amount | | | | because these protections only apply to a |
| that is payable for a fixed amount of time | | | | primary residence, they must also be willing |
| (usually no more than twenty years) - the | | | | to change their primary residence. There are |
| bond portion. The second amount can vary from | | | | stiff penalties for claiming homestead status |
| year to year depending on the needs and | | | | on a property that is not your primary |
| budget of the community. If you're interested | | | | residence. |
| in relocating to one of these communities | | | | |
| it's important to find out how much residents | | | | To apply for SOH portability you must apply |
| are expected to pay each year, as the total | | | | for a new homestead exemption and also make a |
| varies widely depending on the community, the | | | | separate application to transfer the SOH |
| different villages within the community and | | | | benefit to your new homestead. You'll need |
| the types of facilities and services the | | | | DR-501T and DR-501R application forms, which |
| master planned community provides as a whole. | | | | you can obtain from the Florida Department of |
| | | | Revenue web site and turn in to office of the |
| Note that the responsibility for paying these | | | | county appraiser where your new homestead is |
| taxes is tied to the property, not to the | | | | located. |
| owner. If the property changes hands, payment | | | | |
| of community fees and taxes becomes the | | | | How much can you transfer? It depends on |
| responsibility of the new owner. An owner | | | | whether you're moving to a house of greater |
| does have to option to pay off the bond | | | | or lesser value than the house in which you |
| portion of the CDD for their property, thus | | | | currently live. If it a home of greater |
| reducing the amount owed yearly to only | | | | value, you can transfer up to $500,000 worth |
| include the working capital needed to | | | | of SOH protection from your original |
| maintain the community. | | | | homestead. If it's less in value, you can |
| | | | transfer up to 50% of the new property's |
| Property Tax Homestead Exemption | | | | value in SOH protection. |
| | | | |
| Under the homestead exemption, all legal | | | | Stay with me here… |
| residents of Florida can deduct $25,000 from | | | | |
| the assessed value of their primary | | | | For example… |
| residence. This essentially reduces the | | | | |
| taxable value of the property, and reduces | | | | Your current homestead has a value of |
| how much eligible Florida residents pay in | | | | $300,000 and SOH exemption of $150,000. |
| property tax. Certain groups of homeowners, | | | | |
| such as senior citizens, veterans, and the | | | | If your new property has a value of $500,000 |
| blind, may qualify for other exemptions. | | | | you'll receive portable benefits of $150,000. |
| | | | |
| The $25,000 homestead exemption is not | | | | If your new property is valued at $200,000 |
| granted automatically, however. To be | | | | you'll receive $100,000 worth of protection |
| eligible in any given year you must take | | | | (in this case 150,000 of 300,000 is 50% - so |
| possession of the homestead by December 31, | | | | you would apply the 50% to the new property |
| and then apply for exemption no later than | | | | value to arrive at your dollar amount of |
| March 31 of the next year. | | | | reduction of assessed value). |
| | | | |
| Since January 9, 2008, eligible Florida | | | | Assessment Cap for Non-Homesteads |
| homeowners can gain a further $25,000 | | | | |
| exemption under Amendment 1. This exemption | | | | Under Amendment 1, there is now an assessment |
| is received automatically by any homeowner | | | | cap for non-homestead property. This applies |
| who applies and is approved for the original | | | | a cap of 10% on the assessment of both |
| homestead exemption. | | | | residential and non-residential property. |
| | | | |
| The second exemption is calculated as | | | | As of January 1, 2008, all non-homestead |
| follows: | | | | property will be assessed at market value |
| | | | only. However, the assessed increase from |
| - The first $25,000 value of the home is the | | | | year to year is capped at 10%. In addition, |
| original exemption. | | | | the assessed value of the property cannot |
| | | | exceed market value. |
| - The second $25,000 is fully taxable. This | | | | |
| is necessary to allow Florida towns and | | | | Essentially, this means the assessed value of |
| cities where assessed property values are low | | | | non-homestead property will be equal to |
| to continue collecting the revenue they need | | | | market value. If a non-homestead property is |
| to run local government. | | | | appraised at $350,000 in 2008, it will be tax |
| | | | assessed at $350,000. If the property is |
| - The third $25,000 is the new Amendment 1 | | | | capped at 10% cap in 2009, its assessed value |
| exemption. It is exempt from all taxes except | | | | could not increase above $385,000, regardless |
| for school tax. This allows schools to | | | | of market performance. |
| continue receiving the funding they need (if | | | | |
| this third portion was totally exempt, | | | | Non-homestead property owners can apply for |
| schools wouldn't receive enough funding for | | | | this assessment cap in 2009. |
| their schools). | | | | |
| | | | Â |
| Â | | | | |
| | | | Tangible Personal Property Exemption |
| The "Save Our Homes" Amendment | | | | |
| | | | Â |
| The Save our Homes (SOH) amendment prevents | | | | |
| annual property assessments increasing more | | | | The fourth Amendment 1 change is a $25,000 |
| than 3% or the percentage increase in the | | | | tangible personal property exemption. To |
| Consumer Price Index (whichever is lower). | | | | qualify, business owners must file a TPP |
| This guarantees any homeowner who receives a | | | | return by April 1 in the year in which they |
| homestead exemption that the assessed | | | | wish to apply. If you file and your TPP is |
| (taxable) value of their property will not | | | | less than $25,000 in value, there's no need |
| increase more than 3% per year. | | | | to file again unless your TPP value increases |
| | | | over that amount. Tangible personal property |
| SOH protects existing Florida homeowners, but | | | | includes any owned and leased items used by a |
| if you're buying Florida property and you are | | | | business. |