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Homestead Exemption

Florida homestead exemption is program offered to eligible property owners in the state of Florida that can help reduce your property tax liability. This benefit is only offered to homeowners who claim their home as their primary residence (and you can only have one!)

Eligible homeowners can receive up to $50,000 in tax exemptions! This alone can save you hundreds of dollars on your annual property taxes.

In addition to a tax savings benefit, homesteading your property allows you the benefit of Save Our Homes. Save Our Homes is a statute saying the assessed value of your home cannot increase more than 3% in a given year once you’ve been granted homestead exemption.

To Qualify:

  • You must be permanent Florida resident
  • You must own the property as of January 1 for the year you’re applying
  • You must occupy the home as your primary residence
  • You must be a US Citizen or have proof of permanent residence
When Do I Apply?
I always recommend applying as soon as you receive the recorded copy of your deed (usually within a few weeks of closing.) The filing deadline is March 1. My rule of thumb, is apply as soon as you can, even if it’s for the following year. There’s no benefit in waiting. NOTE: you must apply within 2 years of moving into your new home to qualify for homestead exemption.

Where Do I Apply?
You’ll need to apply online or in person with your county. I rounded up the links for the counties in our area below to make this easy for you:

Orange County
Seminole County
Brevard County
Lake County

Do I have to re-apply every year?
Nope. Once you apply you’re good to go for the length of time you own the home unless your primary residence changes (i.e. you move.)

Are there any additional benefits?
Yes, in fact there are! Additional benefits are available to active-duty military and veterans, homeowners aged 65 and older, surviving spouse of fallen heroes, and permanently disabled homeowners. Click the links for more information.

Portability:
If you’ve recently moved from one home to another in the state of Florida, you may be eligible for a third benefit called Portability. Portability allows you to transfer part of your SOH benefit from your old house to your new one which will lower your taxes on your new home. The SOH cap is $500,000 whether you’re upsizing or downsizing.

In order to qualify for portability, you must apply for homestead exemption and portability within 2 years of moving into your new home.

Click here for the portability application

Additional Information:

Additional Benefits of Homeownership in Florida:

The Florida Constitution has additional benefits and protections to homeowners in the state. These protections are found in the homestead law of the Florida Constitution (Article X, Section 4) and therefore offer higher levels of protections that are not easily overturned in legislature.

Protection of the Family: If a married person dies, and the property was titled in the deceased persons name only, the surviving spouse receives a “legal life estate” and the lineal descendant children would receive a remainder estate. If the spouse has no children, they would receive a fee simple estate of the homesteaded property. Both spouses must have signed all contracts, deeds, etc. even if the homestead is only titled in one persons name. The purpose of this law is to prevent families from being displaced in the event of death. This protection only applies to a family’s primary residence. In the event of divorce, the non-owning spouse loses all homestead protections.

Protection of the Homestead: Homestead properties are protected from forced sale from judgment liens for personal loans, credit card debt, creditor debt, etc. Homestead protection doesn’t prevent foreclosure for nonpayment of special assessments, property taxes, HOA fees, mortgages, vendor liens or construction liens.

Size of Homestead: Homestead properties are protected up to a restricted 160 acres of land outside a municipality (city) or 1/2 acre if the property is located within the city.

Source: Crawford, Linda. Florida Real Estate Principals, Practice’s & Law 42nd Edition. La Crosse, DF Institute, Inc. d/b/a Dearborn Real Estate Education, 2019.

Capital Gains Exemption:

The of the most important benefits of homeownership (on a Federal level) is the exemption of capital gains on your primary residence. The IRS allows an exemption of $250,000 for a single person, and $500,000 for a married couple. This means when you sell your property, any “profit” you made in the form of equity (up to $250,000 if you’re single and $500,000 if you’re married) is exempt from capital gains tax. Considering capital gains tax can run you 15-20% depending on your tax bracket, this is a massive tax savings!

In order to take advantage of this exemption, the home must be your primary residence, and you must own it for at least 2 of the last 5 years. There are a few exemptions from the two year rule including if you had to sell your home for a job transfer, health reasons, or if you don’t meet the minimum tax bracket requirements. Speak to your tax advisor for further information on this.

Source: Crawford, Linda. Florida Real Estate Principals, Practice’s & Law 42nd Edition. La Crosse, DF Institute, Inc. d/b/a Dearborn Real Estate Education, 2019.

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