Most everyone knows that the standard homestead deduction is $50,000. So, if your homes assessed value is $500,000 that $50,000 homestead comes off the top thereby reducing your taxable (assessed value) to $450,000 which saves you about $1,000 per year depending on the municipality you live in.
But the real benefit is the “save our homes cap” (SOH). The SOH cap limits the increase of your homes taxable value each year. The maximum increase in taxable value is limited to 3% or the annual consumer price index (CPI) whichever is lower. The SOH has been in effect since 1992 when Florida voters approved the amendment to the Florida Constitution to prevent homeowners from being “taxed out” of their homes in an escalating market.
The Florida Save Our Homes Cap (SOH) saves you thousands of dollars on Real Estate taxes for as long as you live in your home. Now let’s take a look at how you can take those savings with you if you decide to move. These benefits can transfer if you UPSIZE or DOWNSIZE to any home located in any County in the State of Florida.
For Example:
Your Current Homestead
If you are upsizing it’s a fairly simple calculation; you take your accumulated amount of your SOH cap and transfer it to your new home and your Assessed Value drops accordingly. Then subtract your $50,000 Homestead Exemption to arrive at your taxable value..
If you are downsizing you transfer a percentage of your SOH benefits. This is calculated by dividing the Just Value of your new home by the Just Value of your old home. This will give you a percentage
(in our example below it is 80%). Now multiply your accumulated SOH differential from your old home times the percentage to determine the new SOH reduction. Then subtract your $50,000 Homestead Exemption to arrive at your taxable value.
To see what your current SOH value is you can go to the Pinellas County Property Appraiser website: pcpao.org On the left side bar click Search Our Database then By Address. Enter your address and you will be taken to a link, click the link to proceed to your full property record. Note the Just/Market Value and the Assessed Value in the most recent tax year. Subtract Assessed Value from Just/Market Value and that is your accumulated SOH benefit.
If you, a family member or friend have sold a home this year make sure you or they file Homestead and apply for a transfer of the accumulated SOH benefit by the end of the year.
If you have any questions please give me a call.
Mortgage Rates Continue Climbing
Mortgage rates have increased 1.5 percentage points over the last three months alone, the fastest three-month rise since May of 1994. The increase in mortgage rates has softened purchase activity such that the monthly payment for those looking to buy a home has risen by at least 20 percent from a year ago.
