Florida is famous for having no state income tax — but what about property taxes? Understanding Florida's property tax system is essential for both buyers and sellers. There are key protections and exemptions that can dramatically affect your annual tax bill, and many new residents leave thousands of dollars on the table simply because they don't know about them.
How Florida Property Taxes Work
Florida property taxes are based on the assessed value of your home multiplied by the millage rate set by your local taxing authorities (county, city, school board, and special districts). The millage rate varies by county but typically ranges from 1.5% to 2.5% of assessed value annually.
The key is understanding that your home's assessed value is not necessarily the same as its market value — and Florida law provides important protections to keep that assessed value from rising too quickly.
The Homestead Exemption
If your Florida home is your primary residence, you are entitled to the Homestead Exemption — one of the most valuable tax benefits available to Florida homeowners. The standard exemption reduces your home's taxable value by $50,000:
- The first $25,000 applies to all taxing authorities
- The second $25,000 applies to all taxing authorities except school taxes
On a $500,000 home in a county with a 2% effective tax rate, the Homestead Exemption alone can save you $700–$900 per year. File for it by March 1st of the year following your purchase.
Save Our Homes (SOH) Assessment Cap
Once you have a Homestead Exemption, Florida's Save Our Homes law limits how much your assessed value can increase each year — to the lesser of 3% or the change in the Consumer Price Index. This protection is enormous in a rising market.
For example: if you bought your home in 2015 and it has appreciated 150% since then, your taxable assessed value has only increased by a maximum of 3% per year — meaning you may be paying taxes on a value far below the current market value. This is why long-time Florida homeowners often pay dramatically lower property taxes than new buyers.
Important for buyers to understand:
When you purchase a home, the property is reassessed at close to market value. You cannot inherit the seller's low assessed value. Budget for property taxes based on current market value, not the seller's tax bill, which may be much lower due to years of SOH protection.
Portability — Moving Your SOH Benefit
If you're selling a Florida home with a Homestead Exemption and buying another in Florida, you can transfer up to $500,000 of your accumulated SOH benefit to your new home. This is called portability and it can significantly reduce your tax bill on your new property.
To take advantage of portability, you must apply when you file for your new Homestead Exemption. Don't leave this money on the table — if you've built up significant SOH savings, this benefit can save you thousands every year on your new home.
Other Exemptions Available
- Senior Exemption: Additional exemption for homeowners 65+ with limited income
- Disability Exemption: Total exemption available for certain disabled veterans and first responders
- Widow/Widower Exemption: Additional $500 reduction in taxable value
- Agricultural Classification: For properties actively used for agriculture
Florida's property tax system has quirks that can catch new residents off guard — both positively and negatively. If you'd like a clear picture of what your property taxes will look like on a specific home you're considering, reach out. We'll walk through the numbers with you before you make an offer.
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