Please note: This article is general information about Florida homestead rules. It is not legal or tax advice. Homestead questions — especially after a death or divorce — deserve a Florida attorney's review of your specific facts.
The exemption: it lowers your taxes while you own, then ends
The homestead exemption takes up to $50,000 off your home's assessed value for property tax purposes. It belongs to you, on that house, while it's your permanent residence. When you sell, your exemption on that property simply ends — there's nothing to repay and no penalty for having claimed it (assuming it was properly claimed). The buyer starts fresh: they'll apply for their own exemption if the house will be their permanent residence. One practical point: if you sell mid-year, property taxes are prorated at closing between you and the buyer based on the closing date, as in any Florida sale.
Save Our Homes: the benefit you can take with you
The Save Our Homes cap limits how much your home's assessed value can increase each year — 3% or inflation, whichever is lower — no matter how fast market values climb. Long-time owners often have a large gap between market value and assessed value, and that gap is real money saved every year.
When you sell and buy another Florida home, portability lets you transfer up to $500,000 of that accumulated cap benefit to your new homestead. Two cautions: you have to apply — it isn't automatic — and there's a deadline (generally, you must establish the new homestead within three tax years and file the portability application by March 1 of the relevant year). Sellers who are downsizing within Florida leave real money on the table every year by missing this. If you're selling one Florida home and buying another, put portability on your checklist the week you close, not the following spring.
