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