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Learn how some homeowners pay as little as one third the property taxes as people living on the same street because of Florida’s Save Our Homes Law. Then learn how to take advantage of the law.
I have a past customer… we will call her “Jennifer” and she lived in her house in South Tampa for 32 years before it started to fall apart.
She had to deal with repairs and replacements constantly. “It was one thing after another,” said Jennifer.
That combined with a desire to be closer to family… it was time to find a better house, but Jennifer didn’t know where to go. After all, wouldn’t moving to a new home mean a much higher property tax bill every year? How could she afford to pay?
Even with lower tax milage rates in Valrico, Wesley Chapel, Riverview, and other neighborhoods around Tampa Bay affordability could be an issue if she wanted to move into a much newer house in Valrico.
How could this be the case? Because of Florida’s Save Our Homes Amendment, Jennifer was paying a fraction of the property tax her neighbors were paying. Her taxes were so low that she did the “Lindy Hop” dance every time she saw her small tax bill compared to her neighbors.
Would her property taxes soar if she moved to her new house? I’m talking about a newer, larger house in Valrico that would make it possible for Jennifer’s daughter and grandchild to move in (which would allow Jennifer to spend more time with her grand-baby!) Would this dream of a new house and new life for her family be shattered by the “tax man”?
Not on this clever grandma’s watch!
Fortunately, due to reforms passed in 2007, Jennifer can effectively transfer her discounted tax bill to her new home thanks to updates to the Save Our Homes Amendment (the nickname of Amendment 10 of the Florida Constitution) or SOH. SOH is “an assessment limitation, or ‘cap’, on increases in the assessed value of a homestead residence.” SOH keeps the tax value of a home from growing more than 3% even if the home’s value goes up over 100% in 5 years like they have in and around Tampa.
Unfortunately, many Florida homeowners don’t know that their tax break can be transferred, in most cases, to a new home, effectively allowing them to move from an older home to a much better, larger one with little or no increase in property taxes. Often times, they will say to me… “Where will I move? How could I ever pay the taxes?”
Many lucky folks like Jennifer (or you or your parent[s]), who qualified for SOH years ago, are quietly smiling as their property taxes are tiny compared to folks living on the same street in homes of comparable value.
Fair? I don’t know. Helpful for people like Jennifer? Yes!
What about you? If you sell your older, smaller home in South Tampa and move to something newer and much nicer in the suburbs, will you be able to transfer your Tallahassee-infuriating tax benefit to your new house?
In most cases, yes, you’ll be able to transfer up to $500,000 of your tax benefit to your new home.
Sounds too good to be true, right? Why would Florida governments allow such a thing? One reason is that older homes like Jennifer’s are often times replaced by larger, MUCH higher-priced homes. Local and state government will earn far more taxes from these new homes.
This change to Save Our Homes has benefited Florida homeowners for more than 10 years and whoever can take advantage of this law, should. Keeping your property taxes low is just another reason why now may be the time to sell your older house and buy a newer low-maintenance house that costs no more than your current house.
Save Our Homes has been a big factor in helping families sell older, smaller homes to builders in South Tampa. Many of these homeowners have reached out to me… my name is Robert Wilson, I’m the Director of Dirt with EXIT Bayshore Realty. If you would like to talk about selling your property to a builder, and understanding how your property taxes in a new home can remain affordable… you may call or text me at 813-784-4199.
The Palm Beach County Property Appraiser’s website does a great job of explaining portability. Portability allows you to transfer all or a significant portion of your tax benefit to a new home (in Florida). The text below comes from their website and applies to all counties in Florida:
If your new residence has a higher market value than your former residence, the portability amount is determined by subtracting the assessed value of the former home from its market value.
For example, if the market value of your previous home is $250,000, but the assessed value is $150,000 because of the SOH benefit, then the assessed value of your new home will be reduced by $100,000, and the 3 percent SOH cap will continue on that portion of your new home’s assessed value.
(For Example: “that portion of your new home’s assessed value” means, in this example, suppose the assessed value of your new home is $260,000. You would pay taxes on $160,000 because of SOH. The $160,000 value would grow at a max of 3% annually going forward).
If the new residence has a lower market value, you can transfer a percentage of the difference from your previous property to your new home. To qualify for portability, you must establish your new residence on or before January 1 of the second year after leaving or selling your prior residence.
Of course, if the property you are selling is in Tampa, you’ll want to go to the Hillsborough County Property Appraiser’s website. They have an extensive list of frequently asked questions regarding portability and even address unique scenarios such as, “I co-own a homestead with a friend and we have a $700,000 CAP. Can we each take $350,000 to our separate new homesteads?”
The property appraiser’s website also has important forms including the Portability Application and other helpful information.
Now you know how to keep your property taxes from soaring even after you move to a new house in Florida. I hope this information was helpful to you.
I wrote this article to help educate potential sellers. “Jennifer” represents a number of clients that I have helped sell to a builder after they decided to make a move to be closer to family (and usually family means grandchildren because they are the best). It makes me happy that I was able to contribute in a small way and I like to imagine the joyful times they will have together.
Because I specialize in transactions that involve selling older, smaller homes and lots to builders, I’ve seen the dozens of issues (such as property taxes) that can arise. My experience and specialization allow me to educate sellers and help builders who want to pay fair prices so that both parties can quickly come to terms on sales agreements. This allows me to make the entire process easy for YOU.
If you have a question about any of this, call or text me a question at 813-784-4199 or you can even request an offer for your current property online at SouthTampaTeardowns.com
Whether we work together or not, make sure to bring your tax savings to your new home, and do a celebratory dance that would make Jennifer proud!