The Florida Constitution was amended effective January 1, 1995 to limit the annual increase in assessed value for homesteaded properties. This amendment, commonly referred to as “Save Our Homes” or “SOH”, caps the annual increase for properties receiving a homestead exemption to three percent or the change in the Consumer Price Index (CPI), whichever is lower, unless there have been changes, additions or improvements to the property, or the ownership of the property has changed. Under Florida law, a residence must be reassessed at market value when it sells.
The Florida Department of Revenue’s “recapture rule” requires that anyone being assessed under the “SOH” will have their value increase each year until it is equal to the just value even when the just value is stable or declining. As such, the assessed value may be equal to, but never higher than, the just/market value of the property.
The following example shows a property that had no cap benefit in 2015, but as values have risen, $35,080 in just value is shielded from taxation in 2019 due to SOH.
The 10% non-homestead cap became effective in 2009, and applies automatically to all non-homestead residential and non-residential properties. Non-homestead properties include those without a homestead exemption such as second homes, vacation homes, vacant land, commercial and rental properties. The 10% cap will only ensure that the assessed value does not increase more than 10% from the previous year’s certified assessed value, providing that the ownership has not changed, there was not a split or combination of the lot in the previous year, or new construction has not occurred. The 10% cap does not apply to school millage. As market values start to move up, more value is deferred from taxation due to the 10% non-homestead cap.