If you sell your Florida homestead and buy a new homestead, you cannot transfer the homestead exemption, but you can transfer the Save Our Homes assessment limitation. Save Our Homes is one of the benefits that comes with homesteading property in Florida. It limits the assessed value of your home to at most 3% per year. Overtime, this can amount to big property tax savings.
As an example, let’s say you bought a home many years ago for $100,000 and homesteaded it. And let’s say, today, the actual market value of the home increased to $250,000. Because of the Save Our Homes assessment limitation, the assessed value of your home is $150,000. There is a $100,000 difference between the Save Our Homes assessed value and the actual market value. That $100,000 difference is what can be transferred to a new property. Now let’s say you want to buy a new home that has a market value of $400,000. You can transfer that $100,000 Save Our Homes assessment difference to the new home and instead of the home being assessed at its $400,000 market value, it will be assessed at $300,000 for tax purposes.
To transfer your Save Our Homes assessment limitation to a new residence, you will need to file the Transfer of Homestead Assessment Difference (Form DR-501T) along with your homestead application for your new residence (Form DR-501).
