Hey there, Miami homeowners! It's Hal Feldman (your friendly real estate agent!), and I'm here to break down a crucial topic that can save you serious cash!

The State of Florida is a truly wonderful place to live, especially if you consider the property tax savings that you can take advantage of. As a resident homeowner in Florida, two important tax saving mechanisms are available to you.
1) Homestead Exemption (HEX)
2) “Save Our Homes” (SOH CAP)

HOMESTEAD EXEMPTION (HEX)

What is the Homestead Exemption and Why Should You Care?

Since 1985, the State of Florida has offered resident homeowners a fantastic break on their property taxes. It is called the Homestead Exemption, and it's a game-changer for Miami real estate owners. It knocks off a chunk of your home's assessed value, which translates to lower property taxes year after year.

Think of it as a reward for putting down roots in our beautiful South Florida! And who doesn't love paying less in taxes?

How Much Can You Save with FL Homestead Exemption?

The Homestead Exemption in Miami-Dade County is pretty straightforward. As long as you, a married couple, own the home and it is your primary residence, you are entitled to $50,000 worth of property tax exemption from all taxing authorities except School Board taxes (which stops at $25,000 of exemption).

But wait, there's more! The Homestead Exemption also comes with built-in protection against yearly skyrocketing property taxes. It caps the annual increase of your assessed value to 3% or the Consumer Price Index (CPI), whichever is lower. This is known as the "Save Our Homes" (SOH CAP) benefit, and it can result in substantial savings over time, especially in a hot real estate market like Miami.

For example, in 2021, when some property values increased by more than 20%, those homestead-exempt properties only saw an increase in their property taxes of 1.7% (the 2021 CPI rate). And, just like bank interest, capping each year can compound and impressively affect your tax savings over the years.

When to Apply for the Miami-Dade Homestead Exemption

If you're a new homeowner in Miami or just moved to Florida, listen up! Applying for the Homestead Exemption should be at the top of your to-do list. Trust me, this could save you a small fortune over the years.

Here's the deal: you can apply for Homestead Exemption between January 1st and March 1st. Remember, you must have been living in the home as your primary residence as of January 1st of that year to qualify. For example, if you bought your home on March 2, 2024, you must wait until 2025 to claim Homestead Exemption.

Where Do I File For Homestead Exemption in Miami-Dade County?

It’s quite simple!

You may apply by going to HOMESTEAD EXEMPTION APPLICATION ONLINE FILING -or-
Print the application form and mail it to: Miami-Dade County Property Appraiser, PO Box 013140, Miami, FL 33101-3140. If you have questions, you may call the Property Appraiser at 305-375-4125.

How Do I Qualify for Homestead Exemption in Florida:

To be eligible, you must own the property and it must be your permanent residence "to the exclusion of all others either in Florida or in another state" as of January 1st of the year you are seeking the homestead exemption.

FULL CRITERIA

You are the property owner.
The property you want to claim the exemption for must be your permanent residence.
The property you want to claim should be the permanent residence of someone you can claim as a dependent on your taxes.
You must have lived at the property on January 1 of the tax year.
The property you want to claim the exemption for may not have been rented for more than 30 days in a given calendar year. (Renting the property for more than 30 days for two consecutive years or more than six months is considered an abandonment of the Florida homestead exemption.)

[If you’re uncertain whether you meet these criteria, contact your tax preparer or CPA. They can help you understand the details of Florida’s tax code to determine whether you qualify for the homestead exemption.]

Once you get approved for Homestead Exemption, it stays with the property (automatically renews annually) until you inform the State of Florida otherwise.

More Ways to Save on Property Taxes in Florida

Besides the Homestead Exemption, Florida offers other property tax exemptions that you might qualify for. These include exemptions for:

Construction for an older family member: Added a mother-in-law apartment to your home? You can apply to have that construction reduce the value of your total property. Complete the Original Application for Assessment Reduction for Living Quarters of Parents or Grandparents form. Note: you’ll have to re-apply for this exemption every year.
Longtime limited-income senior exemption: This one’s a county-by-county exemption and is available only to those who are 65 or older, have lived in Florida for at least 25 years, and have income below a certain threshold. If you meet these criteria and your home is worth less than $250,000, you may qualify for a 100% exemption. Complete the Adjusted Gross Household Income Sworn Statement and Return form.
Deployed service member: State law says this exemption amount depends on how many days you were deployed during the tax year. Complete the Deployed Military Exemption Application.
Disabled veteran: A Florida state law may allow you to take this exemption on top of others you qualify for if you’re 65 or older and were injured during combat.
Survival of a spouse killed in military service: Florida’s Fallen Heroes Act outlines the details of this exemption. See the County property appraiser for the correct paperwork.
Surviving spouse of a first responder: If your spouse was the first responder and was killed in the line of duty, Florida law may make you eligible for this exemption. See the County property appraiser for the correct paperwork.
Other disabled people: Various other disabilities (including blindness, permanent disability, use of a wheelchair, and others) may qualify you for a $500 Florida property tax exemption. To get this exemption, you will need a Physician Certification and the Homestead Exemption Application.

Learn Directly From My Interview with the Miami-Dade Property Appraiser

The Miami-Dade Property Appraiser, Pedro Garcia, sat down with me on January 6, 2022, on “The MiamiHal Real Estate Show” Episode 47 at Miami’s Community Newspaper Studios to explain this topic in more detail. I highly recommend you watch it.

“SAVE OUR HOMES” PORTABILITY

What is the “Save Our Homes” Portability Transfer?

If you already have your home under Homestead Exemption and you ever move, the State of Florida wants to keep you here! That is why, since 2008, they added another property tax savings mechanism for you to use.

“Save Our Homes” Portability allows most homestead owners to transfer their Save Our Homes benefit from their old homestead to a new homestead, lowering the tax assessment and, consequently, the taxes for the new homestead. In effect, you are bringing the years of accumulated property tax savings along with you (at least a percentage thereof), and it is meant to provide Floridians the freedom to choose the best housing for their situation without losing the tax standing they have earned over the years of being in Florida.

Once you have a home with Homestead Exemption, ensure you never lose your accumulated property tax saving benefits by using the “Save Our Homes” Portability Transfer!

How Do I Use the “Save Our Homes” Portability Benefit?

To transfer the Save Our Homes benefit, you must establish a homestead exemption for the new home within three assessment years (three January 1st) after abandoning the homestead exemption on the previous property.

You do so by filing the Transfer of Homestead Assessment Difference (see Form DR-501T) with the homestead exemption application (see Form DR-501). The deadline to file these forms is March 1.

How Much Property Tax Savings Can I Transfer (Port)?

This gets a little complicated, but suffice it to say it is well worth using “Save Our Homes” Portability.

Property owners with Homestead Exemption and an accumulated SOH Cap can apply to transfer (or "Port") the SOH Cap value (up to $500,000) to a new homestead property. This application is known as the "Transfer of Homestead Assessment Difference".

Here are examples of the savings an upsizing and a downsizing homeowner can expect using the Portability Transfer benefit.

UPSIZED PROPERTY EXAMPLE

DOWNSIZED PROPERTY EXAMPLE

Prior Home with “Save Our Homes” Protection
Market Value (as per the County Appraiser): $250,000
Assessed Value: $125,000
Savings you take with you: $125,000 (250k - 125k)

NEW Home with “Save Our Homes” Portability
Market Value (as per the County Appraiser): $225,000
Savings Carried from Old Property: $112,500*
New Home Assessed Value: $112,500 (225k - 112,500)

SAVINGS: $112,500 IN VALUE SHIELDED BY PORTABILITY!

* Savings capped exceed 50% of New Property Market Value. $125,000 to carry over is greater than 50% of the $225,000 Market Value of the New property, which is $112,500. Portability allowed amount = $112,500

Several other ratios may need to be applied to get the exact value of the portability. The estimate can be seen by filling out the same form: HOMESTEAD EXEMPTION APPLICATION ONLINE FILING.

The Bottom Line

The Homestead Exemption and Save Our Homes programs are incredible perks for Florida homeowners, especially in a thriving market like Miami. They offer significant savings on property taxes and provide long-term financial benefits.

However, be aware that you should ensure your actions while owning your home don’t invalidate your eligibility. Miami-Dade County is looking for people who are looking to defraud them of due taxes. Penalties are stiff, and the Appraiser’s Office has powerful automated tools to detect violators. “Some people make honest mistakes when initially filing, or they fail to report a change that affects their eligibility,” said Property Appraiser Pedro Garcia. “We’ll work with those people. But outright purposeful fraud will not be tolerated.”

As your dedicated Miami real estate agent, I'm always here to help you navigate the market's ins and outs. If you have any questions about the Homestead Exemption, Save Our Homes, or anything else related to buying or selling real estate in Miami, don't hesitate to reach out!

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Florida Homestead Exemption

FL Property Tax Savings: The Homestead Exemption & Portability Guide