Long time, no blogging!! What an awesome whirlwind the last few months have been for our business. Our top priority will always be YOU and the referrals you send our way so the blog may have taken a backseat but we are back with some great content planned for 2018!  

Today we are starting a new series called "Real Estate Q&A". It's as simple as it sounds...we will be answering our most commonly asked questions with an expert on the subject matter and delivering them to you monthly. If you have something you would like us to answer then please call or email us!

First up is something that we are asked about very often...How does portability of taxes work? Thankfully, Mark Sherman with LoanDepot has offered to educate us on this often forgotten tax exemption! So without further ado...Meet Mark!


Often times, my customers will ask me about Property Tax Portability when buying a new home. Well below are some of the more commonly asked questions. I hope will help answer some for you.

What is portability?

It’s the ability to transfer the SOH “Save Our Homes” Cap, which is the difference between your market or “Just” value and assessed value, from an existing homestead to a newly purchased homestead.

When did portability go into effect in Florida?

Portability became effective January 1, 2008, with the passage of Amendment 1.

How is it calculated?

If the just value of your new homestead property is more than the just value of your old homestead, you will be able to transfer your Cap up to the $500,000 limit.

(Just Value – Assessed Value = SOH Cap Value) 

So, for example;

Old Homestead:

Just Value: $225,000

Assessed Value: $190,000

SOH Cap Value: $35,000

New Homestead:

Just Value: $325,000

Transferred SOH Cap Value: $35,000

Cap Assessed Value: $280,000

 

If the Just Value of your new Homestead Property is less than the Just Value of your old Homestead, you can transfer a percentage of your Cap to the new Homestead up to the limit of $500,000.

(Old Just Value – New Value X 60% =  SOH Cap Value) 

So, for example;

Old Homestead:

Just Value: $225,000

Assessed Value: $190,000

SOH Cap Value: $35,000

New Homestead:

Just Value: $200,000

Transferred SOH Cap Value: $15,000

Cap Assessed Value: $185,000

 

How long do I have to use my portability benefit?

Once you have sold or abandoned your homestead property the law allows you to transfer your benefit for up to 2 consecutive property tax years.  The new homestead exemption must be established within 2 years (tax rolls) from the last year of the previous homestead exemption. 

How do I apply for portability?

When applying for your new homestead exemption you will need to complete a DR-501T (Transfer of Homestead Assessment Difference) form. If you have already applied for a 2017 homestead exemption in Duval or St. Johns County and had a 2015 or a 2016 Florida homestead, you will need to complete a DR-501T and returned it to us by the March 1st deadline. Please go to http://www.coj.net/departments/property-appraiser/docs/dr501tfillable.aspx in Duval, where the form can be downloaded or https://hx.sjcpa.us/ApplyOnline/WebForm1.aspx in St. John’s County where it is completed online.

How many times can I use portability?

Portability can be used each time you move and establish a new homestead.

Do I have to sell my home before I can qualify for portability?

No, you can abandon or move from an existing homestead and continue to own the property. However, once that home is no longer your permanent residence the homestead exemption will be removed. You will need to apply for a homestead exemption on your new permanent residence and complete a DR-501T (Transfer of Homestead Assessment Difference) form by the March 1st deadline.

Do I have to purchase a new property to qualify for portability?

No, you can abandon or move from an existing homestead to another property already owned by you, for example, a second or vacation home. However, once the first home is no longer your permanent residence the homestead exemption will be removed. You will need to apply for a homestead exemption on your new permanent residence (the second or vacation home) and complete a DR-501T (Transfer of Homestead Assessment Difference) form by the March 1st deadline.

How will I know that I have received my portability?

The amount of your portability will be reflected on your Notice of Proposed Property Taxes that is mailed out in mid-August. If you do not qualify for portability, you will be notified by certified mail no later than July 1.

Are Portability Benefits Split Among Multiple Homestead Owners? 

Yes. For example, in the case of a divorce, the portability Benefit would be split 50/50 and again, must be applied within two (2) years of selling your previous homestead.

 

Mark Sherman

Mortgage Loan Officer

loanDepot, Jacksonville Beach

904-509-8272