Assessment Caps
Assessment Caps
10% Cap
A Cap on the Assessed Value of Your Non-Homestead Property.
Constitutional Amendment 1, approved by voters on January 29, 2008, was a provision to limit increases in the annual assessment of Non-Homestead properties to ten percent (10%). The base-year for implementing this change was 2008 and assessments were capped beginning in 2009.
No, the cap will automatically be applied to your property.
Homestead properties already benefit from the 3% Save Our Homes Cap. However, if you receive a partial Homestead Exemption, the portion considered Non-Homestead is eligible for the 10% Cap.
All properties that do not have a Homestead Exemption, such as rental homes, vacation homes, vacant lands and commercial properties.
There is no guarantee your taxes will reduce due to the 10% cap, as many other factors are involved – such as tax rates and non-ad valorem assessments, neither of which are determined by the Property Appraiser.
Not necessarily. The maximum amount your assessment ca increase from one year to the next is 10%. Depending on market factors, your assessed value could increase less than 10% or could decrease.
The 10% cap applies to all taxing authorities EXCEPT the School District.
If the property is sold, the cap is removed the following tax year and the new owner establishes a new base-year for the cap to be applied. When there is a change of ownership but no deed or other instrument showing the conveyance has been recorded with the Clerk of Court, the owner must complete form DR-430 and file it with the Property Appraiser’s office. Failure to properly notify the Property Appraiser of a change in ownership could result in a tax lien on any property receiving an unqualified cap.
No, the 10% cap does not apply to school tax levies.
Portability
A Cap on the Assessed Value of Your Home.
The ‘Save Our Homes Portability’ benefit became available in 2008, and is your opportunity to transfer the dollar value difference between the assessed value and market value of your prior Homestead property to a new Homestead property anywhere in the state of Florida. The maximum amount that can be transferred to your new Homestead is $500,000.
Many Homestead property owners find they are unable to downsize or relocate to a new residence because purchasing a replacement property starts a new assessment and tax basis at current market values. Portability enables relocation while, at the same time, retaining the limitation on assessed value.
Many Homestead property owners find they are unable to downsize or relocate to a new residence because purchasing a replacement property starts a new assessment and tax basis at current market values. Portability enables relocation while, at the same time, retaining the limitation on assessed value.
You will apply for Portability when you apply for Homestead Exemption by using form DR-501T (Transfer of Homestead Assessment Difference). This application is required in addition to the Homestead Exemption application and our office will assist you in completing this form when you apply for Homestead.
The application deadline for transferring your Save Our Homes cap is March 1st.
If you are porting your savings from another county to Hardee, your application form will be sent to the Property Appraiser’s office in the county where your prior Homestead was located for verification and qualification. Your prior Property Appraiser will issue a Certificate of Portability form DR-501RVSH and return the form to our office for processing.
The application deadline for transferring your Save Our Homes cap is March 1st.
If you are porting your savings from another county to Hardee, your application form will be sent to the Property Appraiser’s office in the county where your prior Homestead was located for verification and qualification. Your prior Property Appraiser will issue a Certificate of Portability form DR-501RVSH and return the form to our office for processing.
To transfer your Save Our Homes cap, you must establish a new Homestead on or before January 1st of the second year after you abandoned your prior Homestead.
No, if you already own another property such as a second home, condominium, or a rental home and you establish your Homestead at that property, with required application and documentation, you can abandon the old Homestead and apply for the Portability benefit on the newly established Homestead.
Yes. Portability moves an assessment limitation to a new Homestead and the other exemptions available are not affected by this change. You may file for any other exemptions for which you qualify.
EXAMPLE 1: When moving to a home with equal or higher market value than your prior home, the statute allows for the following:
” . . . the assessed value of the new Homestead shall be the just value of the new Homestead minus an amount equal to the lesser of $500,000 or the difference between the just value and assessed value of the immediate prior . . .”
If you moved to a property with HIGHER Market Value
| Market Value | $150,000 |
|---|---|
| Assessed Value | $100,000 |
| Portable Cap ($150,000-100,000) | $150,000 |
| Market Value | $200,000 |
|---|---|
| Minus Portable Cap | -$50,000 |
| Assessed Value | $150,000 |
EXAMPLE 2: When moving to a home with a lower market value than your prior Homestead, the statute allows for the following:
” . . . the assessed value of the new Homestead shall be equal to the just value of the new Homestead divided by the just value of the immediate prior Homestead and multiplied by the assessed value of the immediate prior Homestead . . .”
If you moved to a property with LOWER Market Value
| Market Value | $200,000 |
|---|---|
| Assessed Value | $175,000 |
| Portable Cap ($200,000-175,000=$25,000)Percentage of Market ($25,000 ÷ $200,000 = 12.5%) | $25,000 |
| Market Value | $150,000 |
|---|---|
| Assessed Value ($150,000 ÷ $200,000 = .75 x $175,000) | $131,250 |
|
Portability Cap ($150,000 – 131,250) Percentage of Market Value ($150,000 x 12.5%) |
$18,750 |
In both examples above, the portable cap is less than $500,000, so no further adjustment is warranted.
Save Our Homes
Transfer of Your ‘Save Our Homes’ Cap to a Different Florida Homestead.
In 1992, the Florida Constitution was amended to limit the annual increases in the assessed value of property receiving Homestead Exemption to 3% or the percentage change in the Consumer Price Index, whichever is lower. This assessment limitation is commonly referred to as the ‘Save Our Homes’ or ‘SOH’ cap.
If you own and occupy your home as your permanent residence and receive the $25,000 Homestead Exemption, you will automatically qualify for the cap.
If both the Homestead property and vacant lot are owned by the person receiving the Homestead Exemption and are titled in the same manner, may be joined and the SOH cap can be extended to the vacant lot if requested by the owner.
The full value of any improvements (not including normal maintenance) or additions to the property will be added to the capped assessed value.
If property receives a partial Homestead Exemption, either because of the type of ownership (i.e., two owners with only one receiving Homestead) or because of the type of property (i.e., a duplex that has one side used as Homestead and the other side rented), the cap applies only to that portion receiving Homestead Exemption and the remainder is assessed at full market value initially and then will be capped according to the provisions of the 10% cap.
In September 1995, the Governor and Cabinet approved a rule directing property appraisers to raise the assessed value of a qualifying Homestead property by the maximum of 3% or the annual change in the Consumer Price Index, whichever is less, on all properties assessed at less than full market value whether or not that property’s market value increased during that calendar year.
For example, a property’s market value did not change. However, since its assessed value remains below market value, the Property Appraiser must increase the assessed value by the annual limit to bring its value closer to full market value.
For example, a property’s market value did not change. However, since its assessed value remains below market value, the Property Appraiser must increase the assessed value by the annual limit to bring its value closer to full market value.
On January 1st following the sale of the property, the Homestead Exemption and the SOH cap are removed, and the assessed value, if lower than market value, will be increased to equal the market value. The new owner can apply for Homestead Exemption and will be entitled to a new SOH cap. If the new owner has never owned a home in Florida, the cap will be applied to the assessed value the year after Homestead Exemption is first granted. If the new owner(s) had a Homestead Exemption on a previous Florida home, they may be able to transfer their SOH differential to the new home (see Portability).