In Florida, the Save Our Homes Amendment to the Florida Constitution prevents the assessed value of homestead property from increasing more than 3% per year, or the percent change in the Consumer Price Index, whichever is lower. While the tax savings from the Save Our Homes Amendment has no doubt helped many homeowners to stay in their homes even when values were rising, it also tended to discourage homeowners from moving to a new residence, for fear of giving up all of their accumulated property tax savings. In 2008, Florida voters attempted to change that by amending the Florida Constitution to allow for “portability” of their accumulated homestead exemption tax savings. This article will explain the basics of how to “port” your Save Our Homes tax savings to your new residence, and will address some of the more complicated situations that can arise, particularly when more than one owner is involved.
The rules regarding portability are set forth in Florida Statute 193.155(8). Essentially, a homeowner may “port” their Save Our Homes tax benefits to their new home as long as they establish their new homestead within 2 years of abandoning their previous homestead. More specifically, in order to qualify for portability in a given tax year, the homeowner must have received a homestead exemption on their previous homestead in one of the last two tax years. If the new homestead is more valuable than the old homestead, the homeowner may port up to $500,000 of capped value to their new homestead. For example, suppose your old home was worth $350,000, but was assessed at only $250,000 due to the Save Our Homes Amendment (a $100,000 cap differential). If you were to move to a new home worth $500,000, that home would be assessed at no more than $400,000 in the first year, with subsequent increases limited to 3% per year, or the percent change in the CPI. If you move to a less valuable home, the amount of cap differential that you may port will be limited to your old home’s assessed value divided by its just value. For example, if your old home was worth $500,000, but was assessed at $400,000, and you move to a less valuable home, the new home will be assessed at 80% of its just value the first year, as long as the cap differential does not exceed $500,000.
In order to port Save Our Homes benefits, when filing an application for a new homestead exemption, you must also file Form DR-501T, for Transfer of Homestead Assessment Difference by March 1st of the year you intend to establish a new homestead.
Portability When Combining Households
If two people who each have their own homestead decide to acquire a new homestead together, the Property Appraiser will use whichever prior homestead would result in the highest cap differential, and thus the highest tax savings. However, once again, the cap differential may not exceed $500,000.
Portability When Abandoning Joint Property
When joint owners abandon homestead property and acquire new, separate homestead properties, the cap differential that they are allowed to port is calculated as described above. However, the cap differential is then divided by either the number of owners of the prior homestead or, in the case of property owned as tenants in common, by each owner’s proportionate interest in the prior homestead. For example, if two joint owners would be allowed to port a $100,000 cap differential to the same new residence, if they move to separate new residences, they would each be permitted to port $50,000.
Challenging Portability Decisions
A taxpayer may not challenge the assessment of their prior homestead property in a prior year, as that would be contrary to the requirement in section 194.171, Fla. Stat. that all tax assessment challenges be brought within 60 days of the certification of the tax roll or the decision of the VAB. However, pursuant to Florida Statute 194.011(6), if a taxpayer disagrees with the Property Appraiser’s determination of their entitlement to portability or the amount they are allowed to port, they can file a Form DR-486PORT petition to the Value Adjustment Board where their new home is located. The VAB where the new residence is located will then submit a notice to the VAB of the county in which the taxpayer previously resided and that VAB will hear the petition and render a decision. The decision of the VAB in the previous county will be submitted to the VAB in the new county, which will consider that decision in rendering its own final decision (yes, I know – I never said this was a simple process). If a taxpayer disagrees with the decision of the VAB, they may appeal the decision to the circuit court of the county in which their new homested is located, and that proceeding shall be de novo.
March 24, 2010 at 3:46 pm
My husband, Jimmie A Boone, asked about portability of our taxes from 2401 Bayshore Bl, Tampa, FL 33629 to our new home 3301 Bayshore Bl, Unit 509, Tampa, FL 33629-8842. He told me the clerk said we can’t do that.
Please advise me of whether this Amendment 1 allows portability of tax from old home to new home. Feel free to email me at email@example.com.
Respectfully, Tinnell Boone
March 29, 2010 at 2:13 pm
You can’t port the tax amount from your former residence, but you may be able to port some or all of the difference between your former residence’s assessed value and its actual value. You need to talk to the Property Appraiser’s office, not the Clerk’s office, as it would depend on the specific facts, i.e. whether you had a homestead exemption on the former property in the last two years, and whether you have a homestead exemption on the new property. Also, the value of the properties will make a difference.
August 22, 2010 at 7:47 pm
Just got our TRIM notice. We applied for and received the full portability ($500,000) on last years’ property taxes. This year our market value went down, but they also decreased our Save our Home Cap by $65,000. Can they do this, and if so, how is it calculated?
April 21, 2011 at 1:08 pm
If two people who each had their own homestead exemption, marry and buy a new property together, it is my understanding they can “port” the largest cap differential. My question is, does each person have to fill out the portability form on the new property? (it doesn’t look like it can be done together on 1 form)
September 10, 2011 at 5:00 am
sold a property in palm beach county 6/1/10 at that time it had about 50000 of portability 375 vs 325. applied to port it. bought another one in same county.get a letter 5/18/11 from property appriasier stating my application was accepted however there was no portabilty because after i sold it the new market value and assesed value was the same 325 k. i sold for 440k they said i should have filied a petition with vab to challange.i never got a trim notice for that property and had not known they changed the values. the vab says i need a letter from the buyers of last house to file but because the sale was in 2010 i would not be able to do anything about anyway.
September 29, 2011 at 3:50 pm
Your sitiuation is similar to at least 50 new homeowners in my new community. If your sale price was 440k and proven by comp sales and at arms length, your portability should have been 115K (440k-325k) worth about $2200 annually as a tax benefit .The market value used by the PBC appraiser was calculated by mass appraisal (CAMA) and only by appealing successfully before a VAB magistrate would the portability be raised. I know this well because I was able to appeal successfully and raise my portabilty from 2K to 166k. Beside having erronous data for portability calculations, the Appraiser is allowing the new owner to assume your low market value as a basis for his taxes, an unintended tax benefit costing all taxpayers.
In addition, the Value Adjustment Board has effectively just precluded all appeals in the year of sale based on erroneous assumptions concerning the date of ownership
I am not an attorney, nor connected with real estate, but an accountant self-taught in Portabilty procedures.
Ms. Johnson, what is your opinion as to whether the intent of the Portability Amendment is being effectively administered by the Apprasers?
October 3, 2011 at 3:46 pm
I have owned my current home for about 15 years – so the cap is still significant. I would like to build a new home and transfer the cap to the new house. The part I am not sure about is that I would like to rent the existing house (so I would lose my homestead protections on it) while I am building the new house. Can I still transport to the new house if within two years of the year when I rent the original home? Thanks.
November 4, 2011 at 12:15 pm
I just have a question. WE just purchase a home, and the purchase price is $55,000.00 Can we still elligible of homstead?
April 18, 2012 at 7:10 pm
We sold our home in Feb. 2011, downsizing. Because all portability is calculated as of January 1, we have no portability rights until Jan.1, 2012 so the property taxes on our new home are based on 100% value, which is double the amount of taxes we ever had to pay on our previous homestead.
April 26, 2012 at 9:47 pm
Does the homestead port apply if I completely demolish my present house and build another one on the same lot
May 24, 2012 at 6:32 pm
I sold my home in Palm Beach Gardens 10/28/11 and in order to port Save Our Homes Benefits I should have filed the Form DR-501T before 3/31/12 is it to late to file this form now? I am in the process of buying a new home before 12/31/12 and I would like to take advantage of tax benefits from my old residence to my new home. Will I have to file a new homestead exemption form? The sale price of my home $490K and the assessed value at the time was $409K, the home I plan to purchase is $350K what will the tax saving be?
September 26, 2012 at 10:13 pm
I bought a house in Miramar (Broward) for $330K and rented my condo in Aventura (Miami-Dade) valued at around $98K back in September last year (2011). I actually moved to the house and rented the condo in January this year (2012). With the $50K Homestead exemption ($25k + $25k) I was paying taxes for around $48K, which approximately $980 per year. My new house is appraised at about $350K and my taxes for 2012 are around $7,500. What will my tax savings be (transferring my homestead to the house)? Thank you in advance.
October 31, 2012 at 8:55 am
I am a 66 year old women who has owned and lived in my property (condo) for 11 years. When I received my proposed 2012 property tax I had no plans on selling my home. However circumstances changed and I placed it on the market, 15 Oct 2012 and sold ir 30 Oct 2012. I contacted the PB County Property Appraiser’s Office about how I go about getting my Market Value reviewed and adjusted by the VAB because it is assessed and has a market value of $675,000 for 2012, however I sold it for $1,325,000 which means that is the new correct market Value. I was told that I could not apply because I missed the September 17 filing date. So I asked how I could file for next year and was told I couldn’t because said property tax would not be in my name next year. If the average closing date for a house that sells is 90 days that would mean only people who sold their home in June of a given year could apply for portability because they would have sold the property but not closed on it when the new proposed tax bill was mailed out. However anyone who sells their property between October and May cannot file for portability because the following year’s proposed tax bill will not be in their name but the name of the new owner. I have to believe that the Florida statute for portability was not meant to make people apply to the county VAB each year even if they didn’t know if they would or wouldn’t sell their home that year. What recourse do I have?