Portability

In Florida, the Amendment 10 to the Florida Constitution (Save Our Homes) 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” (take with you, translate) 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.

Portability Basics

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. 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 previous 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 at $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.

On top of this Portability savings, you can still apply for Homestead Exemption.

If you move to a less valuable home, you can “port” 60% of your Save Our Homes amount.

For example, if your previous home was worth $500,000, but was assessed by the County at $400,000, due to the Save Our Homes Amendment (a $100,000 cap differential) and you move to a $300,000 home, your portability would be $60,000 ($100,000 x 60%). The new home will be assessed at no more than $240,000 ($300,000 – $60,000).

On top of this Portability savings, you can still apply for Homestead Exemption.

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.