Introduction

For Florida homeowners, rising property values can bring concerns about skyrocketing property taxes. Fortunately, the Save Our Homes Amendment (SOH) provides essential protection by limiting annual increases in assessed property values. This blog explains how the SOH cap works, how to transfer benefits when moving, and how it can save you thousands of dollars.

What is the Save Our Homes Amendment?

The Save Our Homes Amendment, approved by voters in 1992, limits the annual increase in the assessed value of homestead properties to:

• 3% or

• The Consumer Price Index (CPI) increase, whichever is lower.

The SOH cap applies to homestead properties (i.e. your primary residence) and ensures that your property taxes remain manageable, even when market values soar.

How Does the Save Our Homes Cap Work?

When you own a homestead property, there are two critical values to understand:

1. Market Value: The fair market value of your property, determined annually by the county property appraiser.

2. Assessed Value: The value used to calculate your property taxes, which is capped by the SOH Amendment.

Example:

• In 2023, your home’s market value increases from $300,000 to $330,000 (a 10% jump).

• However, the CPI is 6.5%, and the SOH cap limits your assessed value increase to just 3%.

• Your assessed value increases to $309,000 instead of $330,000, reducing your taxable burden.

Over time, this difference between market value and assessed value creates what’s called the SOH benefit.

Portability: Transferring Your SOH Benefit

If you sell your homestead property and purchase another home in Florida, you can transfer up to $500,000 of your SOH benefit to the new home. This process, known as portability, ensures you don’t lose your tax savings.

Key Portability Rules:

• You must establish the new homestead within 3 years of selling your previous home.

• The SOH benefit reduces the assessed value of your new home.

Example:

• Your previous home had a market value of $500,000, but the SOH cap reduced the assessed value to $300,000, creating a $200,000 SOH benefit.

• If you buy a new home valued at $600,000, the assessed value starts at $400,000 after transferring the $200,000 benefit.

Real-Life Case: SOH in Action During Market Spikes

In 2022, parts of Florida saw market values increase by 20-30% due to soaring demand. However, homeowners with a homestead exemption were protected by the SOH cap.

Example:

A Broward County homeowner’s market value increased from $400,000 to $500,000, but the SOH cap limited the assessed value increase to just 3%. This saved the homeowner over $1,500 in property taxes.

Benefits and Drawbacks of SOH

Key Benefits:

1. Long-Term Savings: Protects homeowners from steep property tax hikes.

2. Portability: Allows you to transfer savings to a new homestead.

3. Predictability: Helps homeowners budget for future tax bills.

Drawbacks:

1. Inequality: New homeowners may pay significantly higher taxes than long-term neighbors.

2. Recapture Rule: Assessed values can still increase by 3%, even if the market value drops.

FAQs: Save Our Homes Amendment

1. How do I qualify for the SOH benefit?

You must file for a homestead exemption with your local property appraiser. The deadline is typically March 1st of the tax year.

2. What happens to the SOH benefit when I sell my home?

Your SOH benefit ends unless you transfer it (portability) to a new homestead within 3 years.

3. Can I lose my SOH cap?

Yes. If you no longer use the property as your primary residence or fail to renew your homestead exemption, you lose SOH protection.

4. Does the SOH Amendment apply to second homes?

No. The SOH cap only applies to properties with a homestead exemption.

Take Action: Protect Your Property Tax Savings

• File for a homestead exemption if you haven’t already.

• Understand the portability rules to transfer your SOH benefit when you move.

• Review your property’s assessed value annually to ensure the SOH cap is applied correctly.

Conclusion

The Save Our Homes Amendment is a powerful tool for managing your Florida property taxes. By understanding how it works, homeowners can protect their tax savings, even in booming real estate markets. Whether you’re staying put or planning a move, the SOH cap and portability rules can save you thousands of dollars.

Stay tuned for tomorrow’s blog, where we’ll discuss Florida’s homestead exemption and how it complements the Save Our Homes benefit.

Want expert guidance on property tax appeals or understanding your property valuation? Contact us today for a consultation!