Nearly 5000 Florida homeowners apply for Property Tax Portability

Florida Property Tax Portability - Sitting on Nest EggThe Miami-Dade County property tax appraiser just released that as of March 14, 2008, 4,873 homeowners applied for portability.

In case you are not up-to-date on the details of the portability law, here is an excerpt (in italics) from the Dade county website and some quick examples of my own.

PORTABILITY: Currently, property owners with a homestead exemption receive a benefit known as Amendment 10 or Save Our Homes cap. This Save Our Homes benefit works by limiting the increase of the assessed value of a home to a maximum of 3% regardless of any increase in market value. Under the new law, homeowners will be allowed to transfer this benefit to the next homestead property. This is called portability or a portable cap.  Qualified applicants are now able to transfer (or port) this Save Our Homes benefit up to $500,000, whether they are buying a more expensive or less expensive home.

Homestead property owners will be able to transfer their Save Our Homes benefit (up to $500,000) to a new homestead property within two years of giving up their previous homestead. If the market value of the new homestead is more than the previous home's market value, the entire Save Our Home benefit can be transferred up to $500,000; if the new homestead has a lower market value, the amount of the accumulated benefit that may be transferred is proportional to the value of the new homestead property.

So, for example, Joe Homeowner owned a homestead property in unincorporated Miami-Dade county in 2007, with the following scenario:

 (Please note that I am not including non-advalorem taxes and school district taxes to keep things simple)

2007 Market Value: $331,281
2007 Assessed Value: $142,356 - Homestead Exemption: $25,000
2007 Taxable Value: $117,356

2007 Millage Rate: $18.5679
2007 Property Tax Amount: $2,179.05

Save Our Homes Benefit: $188,925

Joe Homeowner then purchased a new property in unincorporated Miami-Dade County in November of 2007 for $425,000, and he moved in December 2007 to the new home. In 2008, he applied for homestead exemption on the new home.

HOW MUCH PROPERTY TAXES WOULD HE PAY IF PORTABILITY HAD NOT PASSED?

2008 Market Value: $425,000
2008 Assessed Value: $426,500 - Homestead Exemption: $25,000
2008 Taxable Value: $401,500

2008 Millage Rate: $18.5679 (assuming same millage from 2007)

2008 Property Tax Amount: $7455.01

 

HOW MUCH PROPERTY TAXES WILL HE PAY WITH THE PORTABILITY RULE OF AMENDMENT ONE?

Based on the new home with homestead exemption and portability benefits, the following is the new scenario:

2008 Market Value: $425,000
2008 Assessed Value: $426,500 - $188,925 (Save Our Homes Benefit) = $237,075
- Homestead Exemption (doubled through Amendment One) : $50,000
2008 Taxable Value: $187,075

2008 Total Millage: $18.5679 (assuming same millage from 2007)

2008 Property Tax Amount: $3,473.59

Total Savings due to Portability: $3981.42  ($7,455.01 - $3,473.59)

That is an impressive savings of 53%!

However, many people, like new homeowners are left out of any tangible benefit of the new Portability law. Keep your eye out soon for the new blog!