In some neighborhoods here in St. Johns County, we’re currently seeing a stabilization and even a decrease in home values. With this being the case, many may think their property taxes will stay the same or decrease, but instead taxes for those properties will still likely increase. This is due to Florida’s Recapture Rule that is part of the Save Our Homes legislation.
Save Our Homes protects Florida property owners from seeing a rapid increase in property values from one year to the next due to a changing market. It allows for a gradual change instead.
To better understand this, an explanation of the key terms just (market) value, assessed value and taxable value is helpful. Just (market) value is a property’s probable sale price in a competitive market as of Jan. 1 of this year. Assessed value is the just (market) value limited by the Save Our Homes statutory caps. The homesteaded property cap is 3% or the percent change in the consumer price index (CPI), whichever is less. The non-homesteaded property cap is 10%. Taxable value is the assessed value minus exemptions, which is used to calculate property taxes.
Even when the just (market) value stays the same or decreases, the assessed value will still increase by the statutory caps until the assessed value and just (market) value equal. For those property owners who have owned a homesteaded property for many years, the difference between the just (market) value and assessed value could be significant. Therefore, those property owners may never see their just (market) value and assessed value equal, but they are still seeing a tax savings overall based on what they would be paying without the Save Our Homes cap.
Portability is an additional Save Our Homes benefit that allows the accrued difference between just (market) value and assessed value to be transferred (up to $500,000) from one homesteaded property to another within three tax years. This provides homesteaded property owners with a substantial tax savings when making their next home purchase.
For more information, give us a call or stop by our office.