How Do Property Tax Caps Work in Florida?
The Save Our Homes property tax cap is an amendment to the Florida constitution that limits the annual increase in the tax assessment of homestead property to a maximum of 3% of the prior year’s assessment; and its purpose is to encourage the preservation of homestead property and to ensure that Floridians will not lose their homes on the tax block because of rising values of property in Florida. The Florida Constitution was amended effective January 1, 1995, to limit annual increases in assessed value of property with Homestead Exemption to three percent (3%) or the change in the Consumer Price Index, whichever is lower. A change in property ownership will effectively “reset” the Capped Value to full market value. It is important to know that property taxes will increase the next year as the assessed value must be adjusted to equal the current market value. The increase due to the removal of the Cap may double or even triple taxes, depending on how long the previous owner had homestead exemption.
Transferring your homestead by a revocable trust should not affect the homestead tax exemptions: An individual setting up a trust and transferring their homestead property into that trust still remains the owner of the property and may consume or encumber the property during his or her lifetime; therefore, transferring the Florida homestead to the revocable trust should not jeopardize the property tax cap, unless the Florida homestead does not remain the individual’s primary residence as of January 1st of each year, in which case the benefits are lost.
Daniel M. Copeland, Attorney at Law, P.A. looks forward to helping you answer these important questions!
Please contact us today to schedule your consultation. Daniel M. Copeland, Attorney at Law, P.A. 9310 Old Kings Road, South Suite 1501 Jacksonville, Florida 32257 Office: 904-482-0616 Facsimile: (904) 482-0618 E-mail:firstname.lastname@example.org