Amendment One

The Property Tax Reform Constitutional Amendment that voters approved in January 2008 has several components: Additional Homestead Exemption; Portability and Tangible Personal Property Exemption.

Q. How do I get the $50,000 homestead exemption?
A.You must be a qualified Florida resident to receive a Homestead Exemption. Amendment One relates only to properties with an assessed value greater than $50,000. The original $25,000 exemption continues to apply to all tax levies. The additional homestead exemption will increase with the increase in the assessed value of the property.
If for example the assessed value of your homestead property is $70,000, your total exemption under Amendment One would be $45,000. That leaves you with a taxable value of $25,000. The additional exemption applies to all tax levies except school districts.

Q. What is Portability?
A. Portability relates to Florida’s Save Our Homes 3% cap on your property’s assessed value. Under Amendment One, portability allows property owners to transfer all or a significant portion of their property tax savings to their new residence. Your new house can be either more or less expensive than your current property. Your new residence does not have to be in the same county. Portability applies to all tax levies, including school districts, anywhere you move in Florida.

Q. Is there a formula to determine how much I can save with portability?
A. Yes, but keep in mind that portability in Amendment One applies only to homesteaded property. If the property you are moving to is more expensive, you can transfer up to $500,000 of your actual assessment cap savings to your new property. If the property you are moving to is less expensive, you can transfer a proportional amount of the actual assessment cap savings.
Say for example your current property has a market value of $400,000, and its taxable value is $225,000, after the assessment cap savings and the standard $25,000 homestead exemption are deducted. Let’s say your new property has a market value of $500,000. With portability, the taxable value on your new property is $300,000.

Q. Do I have to sell my current homestead property to benefit from portability?
A. No. You can keep your existing property and transfer your cap savings to your new homestead property. Your existing property will lose its homestead status and assessment cap protection.

Q. Do I have to purchase a property to transfer my cap savings?
A. No. If you already own another property and establish a homestead exemption on it, you can transfer your cap savings to your new homestead property. Your existing property will lose its homestead status and cap savings.

Q. Does the Portability benefit require that I buy within a certain time frame?
A. No. The portability benefit is triggered when you establish homestead on the property. For example, if you own a vacation house in Florida, it would not be eligible for the Homestead Exemption benefit because it is not your permanent residence. But let’s say you now have decided to move to Florida permanently and become a full-time resident. The house is now eligible to be homesteaded. Once you establish homestead and then abandon it to buy a different residence in Florida, the original property’s accumulated 3% cap savings on its assessed value is eligible for the Portability benefit.

Q. I’m having a new house built and expect to close the deal in the middle of the year. Can I get the Portability benefit from my previous house during that first year?
A. No. Keep in mind that January 1 is the date that all property values and exemptions are established. There is no Portability or Homestead Exemption benefit for the first year. You will pay the prorated property taxes on the new residence until the end of that year. In a case where the property you buy after January 1 is an existing residence with an established Homestead Exemption, the homestead benefit and its 3% cap on its assessed value would be reflected in your prorated tax bill.

Q. What is tangible property?
A. Tangible personal property is the furniture, fixtures and equipment used by a business. Under Amendment One, the first $25,000 in value of furniture, fixtures and equipment used by a business will be exempt from taxation.

Q. What is the 10% cap on non-homestead property?
A. Under Amendment One, an assessment cap similar to Save Our Homes will be available to non-homestead properties. The annual assessment cap on these properties, such as second homes and commercial properties, is 10%.