The Florida homestead exemption takes up to $50,000 off the taxable value of a home you own and live in as your permanent residence. It also brings the Save Our Homes cap, which limits how much the assessed value of that home can rise each year. Both lower the property tax portion of your monthly mortgage payment, and both stay with you for as long as the home remains your homestead.
The two parts of the exemption
Section 196.031 of the Florida Statutes sets up two layers:
- The first $25,000 of assessed value is exempt from all property taxes, school taxes included.
- A second exemption of up to $25,000 applies to assessed value above $50,000, for every tax except school district levies. Since a constitutional change approved by voters, this second amount is adjusted each January 1 for inflation, so it now runs a little above $25,000.
To qualify, you must hold title to the home on January 1 and live there as your permanent residence on that date. The application goes to your county property appraiser by March 1. After the first year, most counties renew it automatically as long as you still live there.
Save Our Homes and portability
Section 193.155 caps the yearly increase in a homestead's assessed value at 3% or the change in the Consumer Price Index, whichever is lower. Market value can climb faster, but your taxable base can't. When you sell and buy a new Florida homestead within three years, portability lets you carry up to $500,000 of the built-up difference between market value and assessed value to the new home.
A worked example
A buyer closes on a $360,000 single-family home, and the property appraiser sets the first-year assessed value at $360,000. The county's total rate is 18 mills, meaning $18 per $1,000 of taxable value, with 6 of those mills going to schools. For round numbers, both parts of the exemption are treated as $25,000 here.
| Part | Math | Yearly savings |
|---|---|---|
| First $25,000, all 18 mills | 25 × $18 | $450 |
| Second $25,000, the 12 non-school mills | 25 × $12 | $300 |
| Total | $750, or $62.50 a month |
The next year, the market value jumps 8% to $388,800 while inflation runs at 3% or more. Save Our Homes holds the assessed value to a 3% rise, $370,800 ($360,000 × 1.03). That's $18,000 of value the owner isn't taxed on, worth another $324 a year at 18 mills (18 × $18) before the exemptions are applied.
What it means for your mortgage
Lenders build your monthly payment around the taxes you'll pay after the sale. In the first year, the tax bill can still reflect the seller's exemption and cap, and then it resets to market value the following January 1. A good loan estimate plans for that reset so the escrow account doesn't come up short. Filing for homestead right after you move in keeps the second-year bill as low as the law allows.
The mortgage payment calculator shows how the tax line moves your full payment. AAA Capital Funding works with buyers in every Florida county, and a call to 888-601-8344 gets you a payment estimate built on your county's tax figures.