For those who have made a home in Florida and are considering a move to a new Florida home, one of the most important things to be aware of is the newly enacted character Tax Portability Amendment which impacts Homestead character.
So just what is Florida character Tax Portability?
A new Florida law allows residents that are moving from one dominant residence to another to bring the built-up character tax benefits on the assessed value of their existing home along with them to their new home. This can average up to a $500,000 decline in the taxable value of the new home, and a huge annual character tax savings.
Florida dominant residences are protected to a maximum percent increase in the assessed value each year by homestead legislation known as “Save Our Homes”.
Without the portability provision, if you moved you lost all of the assessed value savings produced by Save Our Homes and your new home was assessed at current market value. The Portability Amendment literally made that tax savings “portable” so you can now move up to $500,000 of your accrued Save Our Homes assistance to your new home.
EXAMPLE: You sell your current Florida Homestead that has an Assessed Value of $200,000 and a Just (Market) Value of $350,000. $350,000 – $200,000 = $150,000 in Tax assistance. You buy a new home for $400,000. The $150,000 SOH tax assistance is applied to the new homes Just (Market) Value to creates a lower Assessed Value.
So if you own a home in Florida and are looking into downsizing to a condo or if you have been living inland and want to take advantage of the great waterfront character prices on the coast, a emotional change in character taxes may not be something to worry about. Those homeowners who sell one home in order to move into another complete time, will find that the taxes on their new character are modificated to mirror the savings from their old home.