Amendment 5 and Tax Benefits: What It Means for Florida Sellers
Floridians passed Realtor®-supported Amendment 5, giving sellers up to three years – an increase from two – to transfer accrued property tax benefits to a new home.
After passage of a Florida constitutional amendment this year on property taxes, Floridians now have three years – an increase from two years – to transfer (port) any accrued property tax benefits to a new home.
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.
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, though, 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.
Save Our Homes
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 (Form DR-501T). The deadline to file is March 1.
For more info on SOH property tax savings, visit floridarevenue.com.
Sources: Florida Realtors®