For many South Florida homeowners, the most valuable thing about their house is not the kitchen or the yard. It is the property tax bill. Years of Florida’s homestead exemption and the Save Our Homes cap can leave a long-time owner paying a fraction of what a new buyer would pay for the same home. That raises a fair question before any sale: what happens to your Florida homestead savings when you sell, and can you take them with you? The answer is homestead portability, and understanding it can be worth thousands of dollars a year.
How the Florida Homestead Exemption and Save Our Homes Cap Work
Florida gives two separate benefits to owners who live in their home as a permanent residence on January 1.
- The homestead exemption removes up to $50,000 from the home’s assessed value. The first $25,000 applies to all property taxes, including school taxes; the second $25,000 applies to assessed value between $50,000 and $75,000 and excludes school taxes.
- The Save Our Homes cap limits how much the assessed value of a homestead can rise each year: 3 percent or the change in the Consumer Price Index, whichever is lower.
The cap is where the real money is. South Florida market values have climbed far faster than 3 percent a year for most of the past decade, so an owner who bought in Plantation, Pembroke Pines or Miami fifteen years ago may have an assessed value hundreds of thousands of dollars below the home’s market value. That gap is called the Save Our Homes benefit, or the assessment difference.
What Happens to Your Homestead When You Sell
Homestead status in Florida is determined on January 1. If you sell your home in June, you keep the exemption and the capped assessment for that entire tax year, and the year’s taxes are prorated between you and the buyer at closing. The following January, the property appraiser reassesses the home at full market value for the new owner.
In other words, the buyer does not inherit your low tax bill. This matters even when you are the seller: a buyer who expects to pay your current taxes may be surprised by an escrow estimate based on the new assessment, and that surprise can shake loose a financed deal late in the process. Pricing and negotiating with the buyer’s real tax cost in mind avoids that problem.
Homestead Portability: Taking Your Savings to Your Next Florida Home
Portability lets you transfer your accumulated Save Our Homes benefit, up to $500,000, to a new Florida homestead. Instead of starting over at full market value, your new home’s assessed value is reduced by the benefit you carry over, and the 3 percent cap starts again from that lower number.
The three-year window
You must establish the new homestead within three years of January 1 of the year you abandoned the old one. Florida extended this window from two years to three in 2021, which gives sellers room to rent for a while, wait out a market or take time choosing where to live next.
Upsizing versus downsizing
How much transfers depends on whether your next home is worth more or less than the one you sold.
- Buying a home of equal or greater market value: you transfer the full benefit, up to $500,000.
- Buying a home of lower market value: the benefit is reduced in proportion. You keep the same percentage of savings relative to the new home’s value.
A worked example
Suppose you bought a house in Plantation in 2009. Today its market value is $520,000, but its capped assessed value is $260,000. Your Save Our Homes benefit is the $260,000 difference.
- If you buy a $600,000 home in Davie, the full $260,000 transfers. The new home is assessed at $340,000 instead of $600,000.
- If you downsize to a $390,000 condo in Hallandale Beach, the new home is worth 75 percent of the old one, so 75 percent of the benefit transfers: $195,000. The condo is assessed at $195,000 instead of $390,000.
At typical Broward and Miami-Dade millage rates, a difference of that size can mean several thousand dollars a year in lower taxes, every year you stay.
How to Apply for Homestead Portability
Portability is not automatic. After you buy and move into your new Florida home, file two forms with the property appraiser in the county where the new home is located, by March 1 of the first year you claim the exemption:
- Form DR-501, the homestead exemption application.
- Form DR-501T, the transfer of homestead assessment difference.
Both the Broward County and Miami-Dade County Property Appraiser offices accept applications online. Keep your closing statement from the sale and a record of the address you sold; the appraiser will confirm the prior homestead with the county where it was located.
Timing a Sale Around Your Homestead Savings
Because so much depends on January 1, the calendar deserves as much attention as the price. A few practical points:
- Selling late in the year lets you keep the current year’s exemption on the home you sell. Closing on your next home before January 1 lets you claim it as your new homestead for the following year.
- Selling first and renting is fine. The three-year window protects your benefit while you decide where to go next.
- Moving out of Florida ends the benefit. Portability only works between Florida homesteads.
- Selling with a co-owner, such as after a divorce or a sale between siblings, can raise questions about how the benefit is divided. The property appraiser can explain how the rules apply to each owner.
Florida lawmakers have debated further changes to homestead property taxes, so confirm the current rules with your county property appraiser before you commit to a timeline.
Where a Cash Sale Fits
Sellers who are protecting a homestead benefit usually care about certainty and timing more than anything else. A listing can take months and fall apart late if a buyer’s financing or insurance falls through. A direct sale to a cash buyer lets you choose the closing date, with no showings, repairs or lender conditions, and can close in as little as 7 days when you need it to.
Property Solution Services has bought more than 900 homes across Broward and Miami-Dade since 2016. If you are planning a move and want to see what a direct sale would net compared with listing, see our guide to cash sale net proceeds in Broward County or our answers to the most common questions about selling a house. We buy throughout Plantation, Pembroke Pines, Tamarac, Davie, Hallandale Beach, Miami and Hialeah.
Frequently Asked Questions About Homestead Portability
Do I lose my homestead exemption when I sell my house in Florida?
You keep it for the tax year in which you sell, because homestead status is set on January 1. The exemption ends when ownership changes, and the home is reassessed at market value for the buyer the following January. Your Save Our Homes savings can move to your next Florida homestead through portability.
How long do I have to use homestead portability in Florida?
You must establish a new Florida homestead within three years of January 1 of the year you gave up your previous one, and apply for the new exemption and portability by March 1 of the year you claim it.
How much of my Save Our Homes benefit can I transfer?
Up to $500,000. If your new home has a higher market value than the one you sold, you can transfer the full benefit. If it has a lower market value, the benefit is reduced in proportion to the difference in value.
Does homestead portability work if I move out of Florida?
No. Portability only applies when you establish a new homestead in Florida. If you move out of state, the accumulated benefit is lost.
Does the buyer of my house keep my lower property taxes?
No. After a sale, the property appraiser reassesses the home at its market value as of the next January 1, so the buyer’s tax bill is usually higher than yours. Taxes for the year of sale are prorated between buyer and seller at closing.
What form do I file for homestead portability?
File the homestead exemption application (Form DR-501) together with the transfer of homestead assessment difference (Form DR-501T) with the property appraiser in the county where your new home is located. Broward and Miami-Dade both accept applications online.
Ready to talk through your timing? Call or text (954) 693-9333 or request a no-obligation cash offer, and we will help you plan a closing date that works around your homestead.
This article is general information, not legal or tax advice. Property tax rules change, and your situation may differ. Consult your county property appraiser, a Florida real estate attorney or a tax professional about your specific circumstances.