Liz Arme

UNDERSTANDING THE NEW FLORIDA HOMESTEAD

On January 29, 2008 Florida Voters approved Amendment 1, which made several significant changes to the Florida Constitution regarding property tax laws. The following information is intended to help you understand what must be done and when it must be done in order to take advantage of the benefits from this constitutional provision.

Summary of 2008 Changes to the Florida Constitution:

¨       Allows portability of accumulated Save our Homes (SOH) benefits for homeowners who move from one homestead to another.

§         Homeowners may transfer their SOH benefit to a new homestead anywhere in Florida within 2 years of leaving their former homesteads.

§         Those who sold their homes in 2007 can transfer their SOH benefit to a new homestead if they establish the new homestead by January 1, 2009.

§         If “upsizing” to a home of equal or greater just value, the homestead owner can transfer 100% of the SOH benefit to the new homestead, up to a $500,000 transferred benefit.

§         If “downsizing” to a home with a lower just value, the homestead owner can transfer a SOH benefit that protects the same percentage of value as it did the former homestead, up to a $500,000 benefit.

§         The transferred SOH benefit will apply to School Taxes on the new homestead.  Previous versions of SJR 2D exempted School Tax Levies from the transferred benefit.

¨       Creates an additional homestead exemption worth $25,000, applied to value above $50,000

§         This exemption does not apply to School Tax levies.

¨       Provides an assessment growth limitation of 10% for all non-homestead properties.

§         This assessment limitation does not apply to School Tax Levies.

§         The assessment limitation will expire in 10 years. At that time, voters will decide whether to reauthorize it.

§         Residential properties of nine units or less will surrender accumulated protections at change of ownership or control, as defined by general law.

§         For all other properties (i.e., residential properties of 10 or more units and business properties), the Legislature must define by general law how the property will surrender protections when there is a “qualifying improvement” to the property.  The Legislature may define by general law how the property will surrender accumulated protections at a change of ownership or control.

¨       Creates a new Tangible Personal Property Exemption of $25,000

§         This exemption applies to all Tax Levies.

Amendment 1 Benefits

¨       An Additional $25,000 Homestead Exemption

·         Amendment 1 adds an additional homestead exemption worth $25,000, which is applied to the Assessed Value above $50,000.

·         This exemption does not apply to school tax levies.

·         This exemption shall be effective for the first time in 2008

·         Question: What must I do to receive the additional $25,000 Homestead Exemption?

·         Answer: If you already have the Homestead Exemption and continue that exemption on the property nothing further needs to be done. You will see the exemption on your Notice of Proposed Property Taxes (TRIM Notice) that will be mailed to you in August 2008.

·         Question: What if I just moved into the house prior to January 1, 2008, can I receive this exemption?

·         Answer: Yes, but you must apply for the Homestead Exemption on the new property no later than March 3, 2008. To qualify you, as of January 1, 2008, must be a Florida Resident, own the property, make it your permanent residence and complete an application at the Property Appraiser’s Office.

¨       Portability of the Save Our Homes Benefit

§         Amendment 1 includes Portability of accumulated Save Our Homes (SOH) benefits for homeowners who move from one homestead to another. The law is retroactive to January 1, 2007. Homeowners may transfer their SOH benefit to a new homestead anywhere in Florida within 2 years of leaving their former homesteads. Those who sold their homes in 2007 can transfer their SOH benefit to a new homestead if they establish the new homestead by January 1, 2009. This benefit will apply to all property tax levies including school taxes.

§         Question: I have recently moved and reestablished my homestead, what must I do to take advantage of the new portability law?

§         Answer: You must complete a new Homestead Exemption application at the Property Appraiser’s Office. The filing deadline for 2008 is March 3.

§         Question: What is meant by the Save Our Homes Cap?

§         Answer: The difference between the Market Value of the Homestead Property and its Assessed Value is the differential or Cap. The Cap can be applied (transferred) to reduce the Assessed Value of a newly established homestead.

§         Question: How can I determine the amount of my Save Our Homes benefit that can be transferred?

§         Answer: The answer depends on the market value of your newly established homestead property.

§         Question: What is my Save Our Homes Cap now?

§         Answer: You can look up your Save Our Homes Cap on the Sarasota County Property Appraiser’s Website from the Property Record Search Page.

¨       Upsizing – Moving to home of greater market value:

§         If the market value of the new homestead property is equal to or greater than the market value of the relinquished homestead the entire Cap up to a maximum of $500,000 can be transferred to the new homestead. This is referred to as upsizing.

UPSIZING EXAMPLE # 1
Just (Market)	$475,000
Assessed	$285,000
Cap	$190,000
Portable Amount	$190,000

NEW PROPERTY EXAMPLE # 1
Just (Market)	$700,000
Portable Amount	$190,000
Assessed	$510,000

UPSIZING EXAMPLE # 2
Just (Market)	$1,250,000
Assessed	$600,000
Cap	$650,000
Portable Amount	$500,000

NEW PROPERTY EXAMPLE # 2
Just (Market)	$2,000,000
Portable Amount	$500,000
Assessed	$1,500,000

¨       Downsizing – Moving to home of lesser market value:

§         If the market value of the new homestead property is less than the market value of the relinquished homestead the entire Cap cannot be transferred, however, the same level (ratio) of Assessed Value to Market Value of the relinquished homestead can apply to the new homestead. In other words, if the relinquished homestead had an Assessed Value of $180,000 and a Market Value of $300,000 the ratio is 60% ($180,000/$300,000). If the newly established homestead has a Market Value of $200,000 the Assessed Value would be $120,000 ($200,000 x 60% = $120,000).

DOWNSIZING EXAMPLE # 1
Just (Market)	$500,000
Assessed	$325,000
Cap	$175,000

NEW PROPERTY EXAMPLE # 1
Just (Market)	$250,000
AV Ratio	65.0 %
Assessed	$162,500

¨       A $25,000 Exemption of Tangible Personal Property

§         Amendment 1 offers a new Tangible Personal Property Exemption of $25,000.

¨       Items of Tangible Personal Property such as furniture fixtures and equipment used in business are subject to property tax in Florida. The first $25,000 of the Assessed Value of the Tangible Personal Property shall be exempted from property tax. This exemption applies to all tax levies and shall first be effective for 2008.

§         Question: What must I do to receive the Tangible Personal Property exemption?

§         Answer: You must file a Tangible Personal Property Tax Return with the Property Appraiser. The filing deadline is April 1, 2008

¨       A Non-Homestead Property Assessed Value Limitation

§         Amendment 1 features an assessment growth limitation of 10% for all non-homestead properties. This assessment limitation does not apply to school tax levies.

§         This amendment shall first limit assessments beginning January 1, 2009

For more information contact the

Property Appraisers office at 941-861-8200

www.sarasotaproperty.net