The Homestead Exemption is one of the most valuable property tax benefits available to Florida homeowners. This exemption can reduce the taxable value of a primary residence by up to $50,000, potentially saving homeowners thousands of dollars per year. As a title company, we guide our clients throughout the homebuying process and help them understand the key tax advantages available once they become homeowners. The Homestead Exemption is one of the most important.
What Is the Homestead Exemption?
The Homestead Exemption is a property tax benefit available to Florida residents who make their home their permanent residence. Once approved, this exemption reduces the taxable value of the home, providing a discount of up to $50,000, resulting in lower annual property taxes every year you live in the home.
To qualify for Florida’s Homestead Exemption, you must own the property and live in it as your permanent residence on January 1 of the year you are applying. For most new homeowners, this means that if you bought your home during one year, your first chance to claim the exemption is the following year—as long as you are living in the home on January 1 of that year. Your deed will be recorded in the county records after closing, and this is what the Property Appraiser uses to verify your ownership.
Click here to see Who Qualifies for Homestead Exemption and how to apply for a Homestead Exemption.
County Property Appraisers determine property values as of January 1 each year and evaluate whether each property qualifies for the exemption.
Save Our Homes (SOH): An Additional Advantage
The Homestead Exemption includes the Save Our Homes (SOH) assessment limitation, which caps the annual increase in a homesteaded property’s assessed value at 3% or the Consumer Price Index (CPI), whichever is lower. This cap provides long-term protection by preventing sudden spikes in property taxes when market values rise significantly.
“[The] “Base year” [for SOH cap] is the first year an owner is granted a Homestead Exemption. In the base year, the market value equals the assessed value. The following year, Save Our Homes kicks in for as long as the property has a Homestead Exemption. The accumulated difference between the assessed value and the Market value [as determined by the property appraiser] is the Save Our Homes benefit.” (https://www.miamidadepa.gov/pa/benefit/save-our-homes.page) (For additional information and definitions on the difference between the Property Appraiser’s “Market Value”, “Assessed Value” and “Taxable Value, please see our Additional Resources section below.
The Difference Between the Homestead Exemption and the Save Our Homes Cap
Think of these as two separate benefits Florida gives homeowners who live in their property as their primary residence:
🏠 1. Homestead Exemption = Lowers Your Taxable Value Right Now
What it is:
- Up to A $50,000 reduction in the assessed value of your home for property tax purposes.
- It’s a discount on the value your taxes are based on.
👉 Example:
Your home’s market value: $400,000
Homestead exemption: –$50,000
Taxable value becomes: $350,000
You pay taxes on $350k instead of $400k.
Important:
This exemption is applied every year as long as the home is your permanent residence.
🔒 2. Save Our Homes (SOH) Cap = Limits How Much Your Assessment Can Increase Each Year
What it is:
- A rule that says: Your assessed value cannot increase more than 3% per year (or the inflation rate, whichever is lower), as long as the property remains your homestead.
- It protects you from big jumps in property taxes when the real estate market goes up fast.
👉 Example:
Year 1
Market value: $400,000
Assessed value (after exemption): $350,000
Year 2
Market value jumps to $450,000 (a 12.5% increase!)
But your assessed value can only increase by 3% of the assessed value!
So your new assessed value becomes:
$350,000 × 1.03 = $360,500
You pay taxes based on $360,500,
not the new $450,000 market value.
That’s the Save Our Homes protection.
🎯 Simple Summary Homestead Exemption vs SOH Cap
- Homestead exemption = your “discount” today.
- Save Our Homes cap = your “protection” every year going forward.
| Feature | Homestead Exemption | Save Our Homes Cap |
| What it does | Lowers taxable value | Limits how much the assessed value can increase |
| How much | Up to $50,000 off | Increases capped at 3% annually |
| Purpose | Immediate tax discount | Long-term tax protection |
| When it applies | Every year you live there | Every year after homestead is established |
| Is it transferable? | ❌ No | ✔️ Yes — this is called portability |
Is the Homestead Exemption Transferable? Understanding Portability
The Homestead Exemption cannot be transferred directly from one home to another.
However, if you move to a new primary residence within Florida, you may transfer part of the tax benefit from SOH from your previous homestead. This is called portability.
Portability allows you to move up to $500,000 of the difference between your old home’s market value and assessed value to your new home.
The benefit? Your new property may have a much lower assessed value, which can result in lower property taxes.
Portability Example (Save Our Homes benefit you can take with you)
If your home’s:
- Market value = $500,000
- Assessed value = $350,000
Your SOH benefit is:
$500,000 – $350,000 = $150,000
If you buy a new home, you can transfer up to $150,000 of that benefit to reduce your new home’s assessed value.
This is not the homestead exemption — it is the Save Our Homes benefit (SOH differential).
Who Qualifies for the Homestead Exemption?
The Homestead Exemption is part of the Florida Statutes Florida Statute §196.031 (https://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0100-0199/0196/Sections/0196.031.html)
To qualify, homeowners must:
- Own the property (i.e. have “legal or beneficial title” to the property);
- Use the property as their permanent residence and occupy the property as their primary residence as of January 1 of the application year;
- The owner (or others legally or naturally dependent upon such person) must be a U.S. citizen or permanent U.S. resident and a Florida resident as of January 1.
Commonly Required Documentation
County appraisers may request:
- Copy of Recorded Deed
- Florida Driver’s License or State ID
- Florida Voter Registration (if applicable)
- Vehicle registration
- Social Security Number
- Additional Proof of Residency (utility bills, etc.)
Application Deadline
The deadline to file the Homestead Exemption application is March 1 each year. We encourage homeowners to apply immediately after closing to avoid missing this deadline.
How to Apply for Homestead Exemption
Homeowners may apply:
1. Online (Recommended)
Most Florida counties allow homeowners to apply directly through their Property Appraiser’s website.
For example:
- Miami-Dade County: www.miamidade.gov/pa/
2. In Person
Homeowners may also visit their county’s Property Appraiser’s office to receive assistance and file the application.
Why Your Title Company Matters in This Process
As a title company, we ensure new homeowners fully understand how and when to apply for a Homestead Exemption. This education helps homeowners avoid common mistakes such as:
- Assuming the exemption is automatic (it’s not);
- When the cap kicks in (in the base year, the market value equals the assessed value; the cap on assessed value kicks in the following year);
- Missing the March 1 filing deadline (there is a possible extension, check in your county);
- Losing eligibility after a title change
Key Benefits at a Glance
- Significant annual tax savings, Up to $50,000 reduction in taxable value
- Protection from large increases in assessed value (SOH)
- Ability to transfer tax savings to a new home within Florida (Portability)
Sources and Resources
- Florida Department of Revenue: https://floridarevenue.com/property/pages/taxpayers_exemptions.aspx
- Miami-Dade Property Appraiser:
- Florida Homestead Exemption – Florida Statue 196.031 (Exemption of homesteads)