Homeownership in Florida can bring significant ongoing costs — and property taxes are a big one. But thanks to the Florida homestead exemption, many homeowners in the Sunshine State can reduce their home’s taxable value by tens of thousands of dollars each year and save on property taxes as a result.
Below, we’ll break down how the Florida homestead exemption works, who qualifies, and how to apply.
What is the Florida homestead exemption?
At its core, the Florida homestead exemption is a property tax break that reduces the assessed value of a qualifying primary residence, lowering the property tax burden. The exemption is codified under Florida law (Florida Statute 196.031) and administered locally by each county’s property appraiser, based on state guidance.
At most, Florida homeowners can reduce the taxable value of their primary residence by $50,000. The median annual property tax in Florida is $2,386; unlocking the benefits of the Florida homestead exemption can help lower the amount you owe.
How the exemption works
When a homeowner applies and qualifies for the Florida homestead exemption, the county property appraiser reduces the assessed value of the home, up to $50,000. That doesn’t mean every qualifying home’s value is reduced by $50,000 for the purpose of calculating property taxes though.
Here’s how it breaks down:
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Base exemption: The first $25,000 of a home’s value is exempt from property taxes, including school district taxes.
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Additional exemption: Homes valued at more than $50,000 can qualify for an additional exemption, up to $25,000. However, this second exemption does not apply to school district taxes.
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More valuable homes: Homes that are worth $75,000 or more typically receive both $25,000 exemptions, but there are no further exemptions to reduce the assessed value of the home.
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Inflation adjustment: The second $25,000 exemption increases with inflation (based on the Consumer Price Index) each year you remain eligible. That means you could theoretically have an exemption greater than $50,000.
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Save Our Homes cap: After the first year of receiving the exemption, any increases in your home’s assessed values are capped to 3% or the change in the Consumer Price Index, whichever is lower. This is called the Save Our Homes assessment limitation (or cap). This means, even if the market value jumps sharply, your home’s assessed increase is limited — another big win for keeping property taxes down.
Examples of the Florida homestead exemption
Florida’s Department of Revenue has provided a few examples to demonstrate how the Florida homestead exemption may work.
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$45,000 assessed value: If your home’s value is assessed at $45,000, the first $25,000 is exempt from all property tax, including school district taxes. You’ll pay taxes on the remaining $20,000.
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$65,000 assessed value: If your home’s value is assessed at $65,000, the first $25,000 is exempt from all property tax, including school district taxes. The next $25,000 is fully taxable. The final $15,000 is exempt from non-school property taxes.
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$100,000 or higher assessed value: If your home’s value is assessed at $100,000 or more, the first $25,000 is exempt from all property tax, including school district taxes. The next $25,000 is fully taxable. The third $25,000 is exempt from non-school property taxes (and is adjusted for inflation each year per the Consumer Price Index).
Understanding the Save Our Homes cap
The Save Our Homes (SOH) assessment limitation is one of the most powerful features for long-term Florida homeowners. Because market values can appreciate quickly, the SOH cap ensures your home’s assessed value (which determines your taxes) can’t jump by more than 3%, or the Consumer Price Index, whichever is lower in a given year.
Over time, this can result in a “lag” between market value (what you could realistically sell your home for) and assessed value (the value on which you pay taxes). This could mean huge savings as home prices skyrocket.Â
When you sell the property, however, it will be reassessed at market value for the new owner.
Benefits of the Florida homestead exemption
The Florida homestead exemption offers a wide range of benefits to homeowners:
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Lower taxable value: The most notable advantage is the reduction in the assessed value of your home, which in turn translates into owing less in property taxes. That means, in future years, you may be able to reduce how much of your mortgage payment goes to escrow for home insurance and taxes.
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Annual stability: Because of the Save Our Homes cap, your home is eligible for a cap on year-to-year assessment increases, limiting how much your tax burden can creep upward. This makes tax planning easier and saves you money.
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Portability: Under certain circumstances, you can transfer (or “port”) some of your tax savings when you move to a new primary residence in Florida. More on that below.
Who qualifies for the homestead exemption?
To be eligible for the Florida homestead exemption, a property and its owner must satisfy several requirements:
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Ownership/title: As of January 1 of a tax year, you must hold the property title (as recorded by the county).
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Primary residence: The property must be your primary residence (or that of a dependent), and Florida must be your domicile.
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No other homestead exemption: You cannot simultaneously claim a homestead exemption in another state or county.
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No rental: Again, this must be your primary residence. If you rent out the home, it is not eligible for the exemption.
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Other conditions: Specific Florida counties may have additional procedural or documentation requirements. Speak with your tax preparer or a CPA to fully understand the details of Florida’s tax code and homestead exemption requirements.Â
As a reminder, eligibility criteria can change. Always refer to your county property appraiser or the Florida Department of Revenue’s latest guidance before filing.
How to apply for the homestead exemption in Florida
Ready to apply for the Florida homestead exemption? Here’s how to go about it:
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Confirm eligibility: Double-check that you do, in fact, qualify. Your tax preparer is your best bet for wading through all the legal jargon.
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Gather the required documentation: When applying, you’ll need to supply a wide range of documents. These can vary by county, but in general, you may need:
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Proof of Florida residency, such as a driver’s license, state ID, and/or voter registration
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The property deed or title
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The property owners’ Social Security numbers (and spouses, if applicable)
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Proof of utilities at the homestead address
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Fill out the form: You’ll apply using Form DR-501. Submit it to your county property appraiser by March 1 of the tax year. Several Florida counties allow you to apply online.
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Double-check automatic renewal: If approved, the exemption typically renews automatically each year, as long as nothing changes in your ownership or residency status. Still, it’s a good idea to confirm each year that everything is in order.
Does the homestead exemption expire?
No, the Florida homestead exemption doesn’t expire in the typical sense. Once approved, it remains active year to year unless you lose eligibility. Common triggers that may void your exemption include:
Understanding exemption portability
One compelling feature of Florida’s homestead exemption is the ability to port, or transfer, part of your benefit (i.e., the difference between market value and assessed value) to a new primary residence within Florida.
You have three years from January 1 of the year you moved out of (not sold) your previous residence that was eligible for the exemption. To get the exemption for your new Florida home, you’ll need to file the Transfer of Homestead Assessment Difference (Form DR-501T) along with the homestead exemption application you initially filled out.
Other property tax exemptions in Florida
Beyond the standard Florida homestead exemption, Florida offers additional exemptions and benefits under certain circumstances. Here are a few notable ones:
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Senior homestead exemptions: Florida homeowners who are 65 and older and don’t exceed the income limitation may be eligible for another $50,000 exemption.
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Military exemptions: Active-duty members of the military are eligible for a number of property tax exemptions and discounts when deployed. Veterans who were honorably discharged with a service-related (total and permanent) disability may also be eligible for a total exemption.
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Disability exemptions: Individuals with qualifying disabilities may also receive property tax relief.
