Understanding Florida’s Save Our Homes Program: A Homeowner’s Guide

Florida’s Save Our Homes program (SOH) is a valuable benefit for homeowners that can lead to significant property tax savings over time. Let’s dive into the details of this program and how it can benefit you as a Florida homeowner.

What is the Save Our Homes Program?

The Save Our Homes benefit is a property tax program that was approved by Florida voters in 1992 and implemented in 1995

How Does Save Our Homes Work?

Under the Save Our Homes program, the assessed value of a homestead property cannot increase by more than 3% or the percentage change in the Consumer Price Index (CPI), whichever is lower, from one year to the next

1. You purchase a home and receive homestead exemption.
2. The first year, your property is assessed at its full market value.
3. In subsequent years, even if your property’s market value increases significantly, the assessed value for tax purposes can only increase by a maximum of 3% per year.

This cap can lead to substantial tax savings for homeowners with the homestead exemption over time, especially in areas where property values are rising rapidly.

Who Can Benefit from Save Our Homes?

To benefit from the Save Our Homes program, you must:

1. Own property in Florida
2. Use the property as your primary residence
3. Have been granted homestead exemption on the property

The Save Our Homes benefit automatically applies to properties that have received homestead exemption. Rental and investment properties do not qualify. If you own a property that you use personally for part of the year, the amount of time you must occupy the property to qualify for the homestead exemption would be considered ‘full time’ or spend at least 183 days per tax year in Florida.

The Property Tax Benefits of Save Our Homes

The primary benefit of the Save Our Homes program (SOH) is the potential for significant property tax savings. By limiting the annual increase in assessed value, the program helps to keep your property taxes more predictable and manageable, even as property values rise. For example, let’s say you purchased a home for $300,000 and received homestead exemption. Even if the market value of your home increases to $400,000 over the next few years, your assessed value for tax purposes would be capped at a maximum 3% increase per year. This means your property taxes would be based on a much lower value than the actual market value of your home.

Accrued Save Our Homes Benefits

Over time, as property values increase, the difference between your home’s market value and its assessed value (capped by Save Our Homes) can grow significantly. This difference is often referred to as the “accrued Save Our Homes benefit” or “Save Our Homes differential.”For long-time homeowners in areas with rapidly appreciating property values, this accrued benefit can be substantial, potentially saving thousands of dollars in property taxes each year.

Portability: Taking Your Save Our Homes Benefit with You

One of the most valuable aspects of the Save Our Homes program is the portability benefit. Introduced in 2008, portability allows homeowners to transfer their accrued Save Our Homes benefit to a new homestead property

Here’s how portability works:

1. You sell your current homestead property.
2. You purchase a new home in Florida within two tax years.
3. You can transfer up to $500,000 of your accrued Save Our Homes benefit to your new property.

This feature allows you to continue benefiting from your years of tax savings even if you decide to move to a new home within Florida.

Save Our Homes and Florida Property Tax Assessed Value

Understanding how Save Our Homes interacts with your property’s assessed value is crucial for Florida homeowners. Here are the key points:

1. Just Value: This is the market value of your property, determined annually by your county’s property appraiser.
2. Assessed Value: For homestead properties, this is the value capped by Save Our Homes. It cannot increase by more than 3% per year, regardless of how much the just value increases.
3. Taxable Value: This is the assessed value minus any additional exemptions (like the homestead exemption, and any additional benefits for seniors or veterans).

Your property taxes are calculated based on the taxable value, not the market value. This is where the savings from Save Our Homes come into play.

Important Considerations

While Save Our Homes offers significant benefits, there are a few things to keep in mind:

1. New Construction or Improvements: Any new construction or improvements to your property will be assessed at full market value in the first year, before being subject to the Save Our Homes cap in subsequent years.
2. Change of Ownership: If you sell your home or it changes ownership, the Save Our Homes cap is removed, and the property is reassessed at full market value for the new owner.
3. Non-Homestead Properties: The Save Our Homes benefit only applies to homestead properties. Other types of properties, such as rental properties or second homes, are not eligible.

How to Apply for Save Our Homes

The good news is that you don’t need to apply separately for the Save Our Homes benefit in Florida. When you apply for and receive homestead exemption on your property, you automatically become eligible for Save Our Homes.

To apply for homestead exemption:

1. Contact your county property appraiser’s office or visit their website.
2. Fill out the homestead exemption application.
3. Provide proof of residency (such as a Florida driver’s license or voter registration).
4. Submit your application by March 1st to receive the exemption for that tax year.

Conclusion

The Save Our Homes program is a valuable benefit for Florida homeowners, offering potential for significant property tax savings over time. By understanding how this program works, you can make informed decisions about your home ownership and take full advantage of the tax benefits available to you.Remember, while Save Our Homes can lead to substantial savings, it’s always a good idea to consult with a tax professional or your local property appraiser’s office for personalized advice about your specific situation.

Resources

1. SOH benefit program:  https://www.hcpafl.org/property-info/save-our-homes
2. SOH Portability:  https://beckerlawyers.com/floridas-save-our-homes-benefit-the-ability-to-transfer-the-benefit-to-a-new-homestead
3. SOH Assessment Cap:  https://www.jacksonville.gov/departments/property-appraiser/save-our-homes-amendment-10
4. Florida Department of Revenue:  https://floridarevenue.com/property/Pages/Taxpayers_Exemptions.aspx