Portability and homestead and what you need to know

The concepts of real estate portability and homestead are key aspects of property tax laws in some jurisdictions, notably in states like Florida. Here's an overview of each:Real Estate PortabilityReal estate portability, particularly in the context of Florida, refers to the ability of homeowners to transfer some or all of their accrued property tax benefits from one home to another within the state. This concept is part of Florida's Save Our Homes (SOH) benefit.Key Points:Save Our Homes Cap: Limits the annual increase in the assessed value of homestead property to 3% or the rate of inflation, whichever is lower.Portability: Allows homeowners to transfer the SOH benefit to a new homestead property, potentially reducing the new property's assessed value and, consequently, the property tax.Eligibility: To be eligible, the homeowner must establish a new homestead within three years of abandoning the previous homestead.Homestead ExemptionA homestead exemption is a legal provision that helps shield a portion of a home's value from property taxes. This can lead to significant property tax savings for homeowners.Key Points:Exemption Amount: In Florida, the standard homestead exemption allows homeowners to exempt up to $50,000 of their home's assessed value from property taxes. The first $25,000 applies to all property taxes, and the second $25,000 applies to non-school taxes.Primary Residence: The property must be the primary residence of the homeowner to qualify.Additional Benefits: Certain individuals, such as seniors, veterans, or individuals with disabilities, may be eligible for additional exemptions.Interaction Between Portability and Homestead ExemptionWhen a homeowner sells their current homestead and purchases a new one, they can transfer their Save Our Homes benefit to the new property. This process involves calculating the differential between the market value and the assessed value of the old homestead and applying a similar benefit to the new homestead's assessed value.Example ScenarioCurrent Home: A homeowner's current home has a market value of $300,000 and an assessed value of $200,000 due to the Save Our Homes cap.New Home: The homeowner purchases a new home for $400,000.Portability: The homeowner can transfer the $100,000 SOH benefit (the difference between market and assessed value) to the new home, reducing its assessed value to $300,000 ($400,000 - $100,000).Application ProcessTo apply for portability and the homestead exemption:File Homestead Exemption: File a homestead exemption application with the local property appraiser's office.File Portability Application: File a separate portability application to transfer the SOH benefit.ConclusionUnderstanding the rules and benefits of real estate portability and the homestead exemption can lead to significant property tax savings. It's important to check with local property appraiser offices for specific requirements and deadlines.tune in and learn at https://www.ddamortgage.com/blogdidier malagies nmls#212566dda mortgage nmls#324329 Support the show