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