Save Our Homes and homestead portability

If you have owned an Orange County home for a few years, the most valuable number on your TRIM notice may not be your exemptions. It is the gap between your market value and your assessed value. That gap is created by Save Our Homes, Florida's constitutional cap on homestead assessments, and portability lets you take up to $500,000 of it with you when you move within Florida. This guide explains both, shows how to calculate your benefit, and walks through applying.

What Save Our Homes does

Save Our Homes is a provision of the Florida Constitution approved by voters in 1992 and in effect since 1995. For a property with a homestead exemption, it limits how much the assessed value can increase each year:

• 3%, or
• the percentage change in the Consumer Price Index (CPI) for the prior year,

whichever is lower.

The cap applies starting the year after you first receive homestead. In the first homestead year, the property is assessed at market value. From then on, the assessed value can rise only by the cap each year, no matter how fast the market rises.

A simple example

Suppose you homesteaded a home in Winter Park when its market value was $400,000. The market then rose 7% a year for five years.

By year six, nearly $100,000 of value is shielded from tax. At 18 mills, that is about $1,750 a year in savings, on top of the homestead exemption. The gap keeps growing as long as the market outpaces the cap.

What the cap does not do

• It does not cap your tax bill. Millage rates can change, and new non-ad valorem assessments can be added.
• It does not apply to non-homestead property. Rentals, second homes and commercial property have a separate 10% cap that excludes school taxes.
• It does not stop recapture. If your assessed value is below market value, it keeps rising by the cap each year even if the market falls, until the two meet.
• It does not cover new improvements. Additions, pools and other new construction are added at market value.

Recapture: why assessed value can rise in a down market

Many owners are surprised to see their assessed value go up in a year when home prices fell. Florida law requires the assessed value of a capped homestead to rise by the annual cap amount, as long as it stays below market value. This is called recapture.

Example: your market value falls from $500,000 to $480,000, but your assessed value is $350,000. The assessed value can still rise by up to 3%, to about $360,500, because it remains well below market value. Only when market value drops below the capped assessment does assessed value fall.

Our news post on why a cooling market doesn't always cut your tax bill explains this further.

When Save Our Homes resets

The cap stays with the owner and the home. It resets to market value on the January 1 after:

• A change of ownership, such as a sale, or a transfer that adds or removes owners (with exceptions below)
• Loss of homestead, for example when you move out or rent the entire home
• Abandonment of the homestead

Changes that generally do not reset the cap include:

• Transfers between spouses, including adding a spouse to the deed
• Transfers after the death of a spouse to a surviving spouse who keeps the home as homestead
• Transfers in a divorce where one spouse keeps the home as homestead
• Transfers into or out of a qualifying trust where the same person keeps the beneficial interest and homestead

If you plan to change a deed, ask the official Property Appraiser first. An unnecessary reset can cost thousands of dollars a year.

Portability: taking your benefit with you

Before 2008, moving meant losing your Save Our Homes benefit. Many long-time owners felt locked into homes they had outgrown. Voters then approved portability, which lets you transfer your accumulated benefit to a new Florida homestead.

Who qualifies

You can use portability if:

• You had a Florida homestead exemption on a prior home,
• You establish a new Florida homestead within three years of January 1 of the year you abandoned the prior one, and
• You apply for portability along with your new homestead application.

The prior homestead can be anywhere in Florida. Moving from Miami-Dade, Seminole or Osceola into Orange County works the same way as moving within Orange County.

The $500,000 limit

The transferable benefit is capped at $500,000. For most owners, the cap is not a concern, but it can matter for high-value homes held for many years.

Upsizing: the full benefit transfers

If your new home's market value is equal to or higher than your old home's market value, you transfer the full Save Our Homes benefit, up to $500,000.

Example: your old home in Apopka had a market value of $350,000 and an assessed value of $230,000, a $120,000 benefit. You buy a $500,000 home in Winter Garden. Your new home's assessed value for its first homestead year is $500,000 minus $120,000, or $380,000. Your homestead exemption then applies on top of that.

Downsizing: a proportional benefit transfers

If your new home's market value is lower than your old home's, you transfer a proportional share.

1. Divide the old benefit by the old market value to get a percentage.
2. Multiply that percentage by the new home's market value.

Example: your old home had a market value of $600,000 and an assessed value of $360,000, a $240,000 benefit. That is 40% of its market value. You buy a $400,000 condo in Maitland. You transfer 40% of $400,000, or $160,000, making the new assessed value $240,000.

Spouses and joint owners

When spouses who both owned the prior homestead move together, the benefit transfers to the new home. If they separate and each establishes a new homestead, the benefit can be divided between them. If only one spouse moves, special rules apply. Ask the official office about your situation.

Portability calculator

Use this calculator to estimate your transferable benefit and your new home's starting assessed value. It follows the upsizing and downsizing rules above and caps the transfer at $500,000. It is an estimate only; the Property Appraiser makes the official calculation.

How to calculate your own Save Our Homes benefit

You can find your current benefit on your TRIM notice or property record:

Save Our Homes benefit = market (just) value − assessed value

If your market value is $450,000 and your assessed value is $300,000, your benefit is $150,000. Our homestead savings calculator shows what the exemption itself saves, and the calculator above shows what portability could carry forward.

Applying for portability in Orange County

Portability is not automatic. You must request it.

When to apply

Apply by March 1 of the first year you claim homestead on the new home. Remember the January 1 rule: you must own and live in the new home on January 1 of that year.

What to file

• A homestead exemption application for the new home
• The portability transfer application (Florida Department of Revenue form DR-501T)
• Information about the prior homestead, including its address and county

You can file online with the official Orange County Property Appraiser, or in person if you want help. If your prior homestead was in another county, the Orange County office coordinates with that county's appraiser to confirm the benefit.

The three-year window

The deadline is measured from January 1 of the year you abandoned the prior homestead. If you left your old home in June and it lost homestead on the following January 1, you have until January 1 three years later to establish the new homestead, and you apply by March 1 of that year. Waiting too long forfeits the benefit.

If you sold your old home before buying the new one

That is fine. Many people sell first, rent for a while, then buy. As long as the new homestead is established within the three-year window, you can transfer the benefit.

If you buy the new home before selling the old one

You can only have one homestead at a time. The old home keeps its homestead through the year you move. The new home can be homesteaded the following January 1. File portability then.

Common portability mistakes

Not filing at all

Portability must be requested. Buyers often assume it happens automatically and lose thousands of dollars.

Filing too late

Missing the three-year window or the March 1 deadline in the first new-homestead year can forfeit the benefit, although limited late filing may be possible through the TRIM petition deadline.

Confusing purchase price with market value

Portability uses the Property Appraiser's market value, not your purchase or sale price. Your estimate may differ slightly from the official calculation.

Assuming out-of-state benefits transfer

Only Florida homesteads count.

Losing the cap by changing the deed

Deed changes after you move in can reset the cap. Ask first.

Save Our Homes compared with the non-homestead cap

Florida has two assessment caps, and owners with both a home and a rental in Orange County should understand the difference.

The practical result: in a fast-rising market, a long-held homestead's assessed value may climb only a few percent a year, while a rental next door climbs up to 10% for most taxes and without any cap for school taxes.

Save Our Homes after damage or rebuilding

If your home is damaged by a hurricane, fire or other casualty and you rebuild, Florida law generally lets you keep your Save Our Homes assessment for the rebuilt portion, as long as the home is rebuilt to substantially the same size and it remains your homestead. Any added square footage beyond a set threshold is assessed at market value. If a damaged home is uninhabitable on January 1, the value may be reduced for that year. Keep insurance claim records, contractor contracts and permits, and let the Property Appraiser know about major damage so the assessment reflects the home's condition.

Planning scenarios

Retiring and downsizing within Orange County

A couple who has owned a home in College Park for 20 years may have a very large Save Our Homes benefit. Moving to a smaller condo in the same area, they transfer a percentage of that benefit. Because the percentage can be high, the condo's assessed value may start well below its market value, softening the tax impact of the move. Combine that with any senior exemption they qualify for, and the tax savings can be significant.

Moving up to a larger home

A young family in Ocoee buys a larger home in Windermere. Their full benefit transfers, up to $500,000, because the new home is worth more. The new home's assessed value starts at its market value minus that benefit, and a fresh Save Our Homes cap begins the following year.

Moving from another Florida county

An owner moving from Seminole or Osceola County to Orange County can bring their benefit with them. The Orange County office will verify the prior homestead's values with the other county.

Selling, then renting for a while

An owner who sells in Orlando and rents for two years before buying in Apopka still has time, as long as the new homestead is established within three years of January 1 of the year the old homestead was abandoned.

Marriage and divorce

When two homeowners marry and sell both homes to buy one together, the larger combined benefit is generally subject to the $500,000 limit and specific rules on how benefits combine. In a divorce where both spouses move to new homes, the benefit can be divided between them, often in the proportions they agree on. These situations have detailed rules, so talk to the official office before selling.

Inheriting a home

Heirs do not inherit the prior owner's Save Our Homes benefit, except that a surviving spouse who keeps the home as homestead generally keeps the cap. When a child moves into a parent's home, the assessment usually resets to market value on the next January 1, even if the child claims homestead. The property tax guide covers estates in more detail.

Why Save Our Homes matters when you buy

Save Our Homes also explains why buyers should never assume the seller's tax bill. The seller's assessment may be far below market value. After you buy, it resets. Estimate taxes on the purchase price minus your own homestead exemption and any portability benefit you bring. Our tools help you run the numbers.

Save Our Homes and other exemptions

Save Our Homes reduces your assessed value. Exemptions are then subtracted from assessed value to get taxable value. So the order is:

1. Market value
2. minus Save Our Homes benefit (including any ported benefit) = assessed value
3. minus homestead, senior, veteran, disability and other exemptions = taxable value
4. times millage = ad valorem tax

That is why a long-time homesteader with a large benefit and a senior exemption or veterans exemption can pay a small fraction of a new neighbor's tax.

Checking your Save Our Homes on your TRIM notice

Each August, compare this year's assessed value with last year's. For a homestead, the increase should not exceed the cap percentage for that year, except for new improvements. If it does, contact the official office and consider an appeal before the deadline. The TRIM notice guide shows where to look.

How to apply for homestead portability in Orange County

1. Confirm your timing

   You must establish the new homestead within three years of January 1 of the year you abandoned the old one. Move in and own the new home by January 1 of the year you apply.

2. Gather information about your prior homestead

   Note the prior home's address, county and parcel ID, and the year you left it. If you have old TRIM notices, keep them handy to check the calculation.

3. File your homestead application for the new home

   Apply for the homestead exemption on your new Orange County home with the official Property Appraiser by March 1.

4. File the portability application with it

   Submit the portability transfer application (Florida form DR-501T) at the same time. If both spouses owned the prior home and are moving together, both should be listed.

5. Verify the transfer on your TRIM notice

   In August, confirm that your new home's assessed value is reduced by the transferred benefit. If it is missing or wrong, contact the office and file a Value Adjustment Board petition if needed.

Key takeaways

• Save Our Homes caps homestead assessed value increases at 3% or CPI, whichever is lower.
• Assessed value can rise even when the market falls, until it catches up to market value.
• Portability transfers up to $500,000 of your benefit to a new Florida homestead within three years.
• Upsizers transfer the full benefit; downsizers transfer a proportional share.
• Portability must be requested with your new homestead application by March 1.
• Deed changes, rentals and moves can reset the cap, so check with the official office before making changes to title or occupancy.

For more, read the homestead exemption guide, see the property FAQ, or return to the Orange County property appraiser guide homepage.