Save our homes - Taxes, Taxes & Taxes

What is Save Our HomesIn 1992 voters approved an amendment to the Florida Constitution known as Amendment 10, or Save Our Homes (SOH). SOH is an assessment limitation, or “cap”, on increases in the assessed value of a homestead residence. Those increases are limited to 3% or the percent change in the CPI (Consumer Price Index), whichever is less. The “cap” goes into effect beginning the year after a homestead exemption is granted.Prior to SOH, taxable value, upon which taxes were calculated, was equal to market value less Homestead exemption. When the market value increased, so would taxable value and therefore, taxes. The SOH law prohibits this from happening – allowing for the maximum 3% “cap” to protect assessed value, regardless of how high market values may increase. This prevents owners from being taxed out of their homes when the market is escalating.A SOH benefit stays on a Homestead property, providing there are no ownership changes or property improvements. This can provide significant tax savings over time, especially when the market is increasing, as was seen during the real estate boom of 2004 – 2007. The table below illustrates how significant the tax savings can be with SOH. Let’s assume a home was purchased for $125,000, it qualified for Homestead exemption and the Property Appraiser valued the property at $110,000 for the first year.If property sales in the neighborhood indicate an increase of 15% per year in the market value, the tax benefits due directly to SOH can be seen in the last column. Assuming a tax rate of $20/$1000 of taxable value, the tax savings over 5 years would be $3,153.12. That is a significant savings! Hosted on Acast. See acast.com/privacy for more information.