Home Sellers Tax Benefits Increase: Florida Votes “YES” on Homestead Amendment

2020 Election Amendment 5 Homestead Sellers Blog FLPalmBeach Martin Group Image 1200x500

Floridians passed Realtor® supported constitutional Amendment 5 concerning property taxes during this November election in 2020.

This gives sellers of homes up to three years (an increase from two) to transfer or port any accrued property tax benefits to a new home.

This extends “Save Our Homes” portability period amendment (2020), but it’s not usually a full three years, just as it wasn’t a full two years under the previous version of the law.

Florida Amendment 5, the Florida Extend “Save Our Homes” Portability Period Amendment, was on the ballot in Florida as a legislatively referred constitutional amendment on November 3, 2020. It was approved.

“yes” vote supported extending the period during which a person may transfer Save Our Homes benefits to a new homestead property from two years to three years.

“no” vote opposed extending the period during which a person may transfer Save Our Homes benefits to a new homestead property from two years to three years.


Election Results

Florida Amendment 5

Result Votes Percentage
Yes Approved  7,483,184 74.49%
No 2,562,142 25.51%

Precincts reporting: 100% Election results are unofficial until certified. These results were last updated on November 13, 2020. The measure was passed unanimously in both chambers of the Florida State Legislature.

 

Home Owners Benefits

Sellers who plan to port tax assessment savings to a new home think that if they sold their first home in November, they now have three full years to buy a home and port the savings. 

But since “years” in the law refers to Florida tax years, the first “year” ends the following Jan. 1 – two months later. In this case, that November seller would have two years and two months to port tax savings.

In general, early-in-the-year sellers will have close to (but not quite) three years to transfer their SOH benefit – end-of-the-year sellers will have something closer to two years.

In any case, the passage of Amendment 5 gives every Florida seller a minimum of two years to port their SOH property tax assessment savings to a newly purchased home.

This amendment was designed to extend the period during which a person may transfer “Save Our Homes” benefits to a new homestead property from two years to three years.

 

What is the “Save Our Homes” benefit?

Homesteads, or primary residences, are subject to property taxes in Florida, which must be assessed at just value, except that every primary residence is eligible for a $25,000 homestead exemption. 

Another $25,000 homestead exemption is applied to homesteads that have an assessed value of more than $50,000 up to $75,000. The homestead exemption reduces the taxable value of a property.

Amendment 10 of 1992, a citizen initiative known as the “Save Our Homes Amendment”, limited homestead property valuation increases for homes receiving a homestead exemption to a maximum of 3% annually. Voters approved the measure in a vote of 54% to 46%.

The difference between the just value and the assessed value is referred to as the Save Our Homes (SOH) benefit.

A home declared as a primary residence with a local tax office qualifies for the Save Our Homes assessment limitation. In each year after that, its property tax assessment can’t increase more than 3% or the percentage change of the Consumer Price Index (CPI), whichever is less.

If a home’s value rises one year by 6%, for example, their assessment goes up 3% at most, and that portion not subject to tax is backed out of their assessment and called the SOH benefit.

The recently passed Amendment 5 impacts the transferability of this SOH benefit, extending it one year longer.

To transfer an SOH benefit, buyers must establish a homestead exemption for their new home and file a Transfer of Homestead Assessment Difference Form DR-501T ( opens in a new tab as a pdf). 

The deadline to file is March 1. Also for more info on SOH property tax savings, visit floridarevenue.com (opens in a new tab as a pdf).

Sources:

  1. Florida Realtors
  2. BalletOpedia.com

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