Porting Tax Savings

The Florida homeowner portability benefit can reduce the tax burden for property owners moving into larger or smaller homes

Portability is the ability to carry accrued property tax savings from one piece of property to another. Any homeowner who is thinking of either purchasing a larger home or downsizing to a smaller one should consider the potential property tax savings portability may give them.

Portability works for homeowners who either are purchasing a larger property or who are downsizing to a smaller property.

Several years ago, Floridians adopted a property tax amendment that allowed for portability of benefits accrued under the Save Our Homes provision of the homestead exemption amendment.

Save Our Homes limits the annual increase in a property’s assessed value to no more than 3 percent, even if its market value increases more. Transfer of the benefit must be made within two years of giving up the original homesteaded property. The same amendment allowed for an additional homestead exemption for the value of a home that exceeds $50,000 (up to an additional $25,000 in tax exemptions).

In 2008 when the portability amendment was passed, the bottom had fallen out of the real estate market and it became almost impossible for many homeowners to realize the savings they had accrued over the years of owning their property. Now portability is a benefit that homeowners who either upsize or downsize can take advantage of.

The property appraiser is responsible for portability benefits to homeowners. The Tax Collector’s Office collects property taxes but does not issue homestead exemptions, nor does it grant portability benefits to homeowners.

If you have sold your home or will soon be doing so, and wish to take advantage of portability, the application deadline is March 1 of the second year since establishing a new homestead.

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.