Florida homestead portability is a valuable benefit for homeowners in the state of Florida. It allows individuals to transfer some or all of their Save Our Homes (SOH) benefit from one property to another when they move within the state.
The primary benefit of homestead portability is to help homeowners protect and preserve the tax benefits they have accrued under Florida’s homestead exemption laws.
Here are some of the key benefits of homestead portability in Florida:
- Property Tax Savings: Homestead portability allows homeowners to carry over a portion of the accumulated tax savings from their previous homestead property to a new one. This can result in significant property tax savings, especially if the previous property had substantial increases in its assessed value.
- Housing Flexibility: Homestead portability promotes housing flexibility and encourages homeowners to upgrade or downsize their primary residence without the fear of losing accrued tax benefits.
- Competitive Housing Market: In a competitive housing market, the portability benefit can give buyers an advantage in negotiating due to an anticipated tax savings.
- Family Succession: In certain cases, homestead portability can also be used to transfer tax benefits to family members under specific circumstances.
Eligibility for Property Portability
There are multiple considerations to review before you can appropriately determine your eligibility for property portability.
You must have a homestead exemption in place on your current residence in order to qualify for portability. Additionally, it only applies to homestead changes in 2008 or after, and at least one owner of the previously homesteaded property must also be an owner of the newly established one. All properties must be located in Florida, but they do not need to be in the same city or county.
You do not need to purchase a new homestead to qualify for property portability. You only need to establish a new homestead.
For example, you may want to convert a home you held as an investment into a homesteaded property.
How to Apply for Property Portability
In order to qualify for property portability, you must complete Form DR-501T, Transfer of Homestead Assessment Difference. This step should be completed when applying for homestead. The homestead application is separate from the portability application.
Therefore, you need to file Form DR-501T with the homestead application Form DR-501 for your new home. March 1 is the annual deadline for filing these forms with your county’s property appraiser’s office.
Keep in mind that you only have three years to transfer the cap to a newly homesteaded property.
Note the countdown starts on January 1 of the year you left the old homesteaded residence, not three years post-sale date.
Talk to a Professional
It is important to note that the rules and regulations regarding homestead portability can be complex and subject to change. Homeowners should consult with local tax authorities or a real estate law professional who is familiar with Florida homestead portability for the most up-to-date and accurate information regarding this benefit. Contact us today to speak with experienced real estate attorneys in Vero Beach, FL.
