Category Archives: Trading Up

Take the Mystery Out of FL Homestead Exemption Portability

Save Our Home Benefit Florida

Last week, we explained how Florida homeowners could cap their property taxes on a homestead using the Florida Homestead Exemption.

So this week, let’s discuss how you can “port” or transfer your assessment limitation or “Save Our Homes” (SOH) benefit with you if you plan to buy or have recently purchased a new home.

What Exactly Is the Save Our Homes or SOH Benefit?

The SOH benefit is the accumulated difference between your Assessed Value and the Just (Market) Value of your homestead.

Even though your assessment value can go up 3% per year — even if your property declines in value — it can never exceed the Just Value of your home.

However, the Homestead Exemption does not automatically transfer from your old home to your new home.  You must file a new Homestead Exemption application for your new property.

The seller’s exemption covers you for the year of the sale, but after that you MUST apply for your own Homestead Exemption.

How Much Can You Port?

You can transfer up to $500,000 of your SOH benefit from an existing home to a new property that’s established as your homestead. But you must do so within two years of selling or abandoning your existing or prior homestead.

For example, if the Just Value (or Certified Market Value) of a prior homestead is $500,000 and the Certified Assessed Value from the prior homestead is $250,000, you can transfer the “Portable Amount” of $250,000. (Portable Amount equals the “Just Value” minus the “Assessed Value.”)

An Important Note About Trading Up or Down

You can transfer the entire amount if the Just Value of the new home exceeds the old home. If you trade down, you can transfer the percentage of the accumulated benefit rather than the full dollar amount.

Using the above example, you’d be able to utilize $250,000/$500,000 = 50%. So if you bought a home for $400,000, you would only pay tax on 50% of the Just Market Value. In other words, you’d pay tax on 50% of the $400,000 or $200,000.”

Follow this link for a detailed example. 

What to File?

To “port” your benefit, you need to complete form DR-501T “Transfer of Homestead Assessment Difference” at the same time you apply for your new homestead exemption.

If you’ve already applied for the homestead exemption, you can still download the application, complete it, and submit it to the Property Appraiser. But, you must do so by March 1. (The same date the application for the Homestead Exemption is due.)

Follow this link to access the application.

For more resources on Florida property taxes go to: http://dor.myflorida.com/dor/property/taxpayers/

Buying or Selling? Contact Us

Hope this post helps you get the most out of your Homestead Exemption and take the tax advantages with you when you move.

If you have any other real estate questions — or are buying or selling a home, get in touch. We’d love to help you out.

You can reach us at 904-509-7584 or send us an email here.

Thanks!

Need a Bigger Home? Now May Be the Time!

trading up

Is your family growing? Do you need more space?

Has your income gone up and made you ready to invest in a nicer and larger home?

If so, I’ve got some great news for you.

Now Is an Opportune Time to Trade Up

First, interest rates are extraordinarily low — below 4% — and are unlikely to go much lower.

In fact, expect them to rise 0.5% to 1% over the next year. That rise will eat away a big chunk of your buying power. You’ll pay more for less house.

Home Values Are Up, But Not Peaking

Here’s one more compelling reason to act now — not later.

Housing prices have regained 82% of their peak value.

So if you’re selling a lower-priced home and buying a more expensive home you’re in great shape.

You’ll get 82% of your current home’s peak price, while saving 18% on the cost of a more expensive home.

Let’s say you bought a home now that had a peak value of $600,000 a few years ago and sell one that was valued at $300,000. You would save  $108,000 on the new purchase, while only “losing” $54,000 of the top value on the sell of your old one.

So you come out ahead by $54,000. 

Now Is Not The Time to Wait

If you wait until your current home regains its peak value, you’ll also have to buy the more expensive home at its higher value.

So you’ll actually lose ground – and dollars by waiting instead of buying now.

Need More Information? Contact Us Today!

Contact us today to explore your options. Give us a call at 904-509-7584 or email us here.

We can give you a detailed assessment of the value of your current home and also help you identify homes in The Beaches area in your new price range.