Homestead and Save Our Homes: the exemption, the cap, and portability

A Florida homeowner who lives in the house on January 1 and applies to the county property appraiser by March 1 gets two things. The first is the homestead exemption, worth $51,411 of assessed value for 2026: $25,000 against every levy including the school board, and a second, inflation-indexed $26,411 against everything except school taxes. The second is the Save Our Homes cap, which from the following year limits the growth in the home’s assessed value to 3% a year or the change in the consumer price index, whichever is lower, no matter what the market does. Over a decade of rising prices the cap is worth far more than the exemption.

Neither arrives by itself. The exemption is an application, not a right that attaches when a deed is recorded, and the cap does not start until the year after the exemption is first granted. A buyer who closes in February 2026 and files in time gets homestead for 2027, and the cap first operates on the 2028 assessment. A buyer who forgets to file pays tax on full market value until the next March 1 comes around, and every year of growth before the cap starts is baked into the base.

Who qualifies and how to apply

The property must be the permanent residence of the owner, or of someone the owner is legally or naturally dependent on, as of January 1 of the tax year. Permanent residence means the place the person intends to make a permanent home, which the appraiser tests with ordinary evidence: a Florida driver’s license or ID card, Florida vehicle registration, voter registration at that address, and, for anyone who is not a U.S. citizen, immigration status that allows permanent residence. A Declaration of Domicile filed with the clerk helps but is not required. A person can have only one homestead anywhere, so a couple with a homestead-type exemption in another state, New York’s STAR or a Michigan principal residence exemption, must give it up; appraisers compare notes.

The application is Form DR-501, filed with the county property appraiser, in most counties online. The deadline is March 1 of the year the exemption is first claimed. A late application can be accepted through the petition deadline for the value adjustment board, roughly late September, with a showing of extenuating circumstances, but it is not something to count on. Once granted the exemption renews automatically each year; the appraiser mails a renewal card in January and the owner returns it only if something has changed. Renting the house out, moving away, or adding a co-owner who lives elsewhere are the changes that matter.

The Save Our Homes cap

Florida values property at just value, which is market value, every January 1. For a homestead, the assessed value, the figure the exemptions come off and the millage is applied to, is a separate number that can rise only 3% or the CPI change from the prior year, whichever is lower, and can never exceed just value. In a year when the market rises 12%, the assessed value rises 3%. In a year when the market falls, the assessed value can still rise by the cap amount until it catches up to just value, a quirk known as recapture that surprises owners who expect a falling market to lower their bill.

The gap between just value and assessed value is the Save Our Homes benefit, and it compounds. A house bought in 2012 for $250,000 and worth $600,000 today may be assessed at $370,000; the owner is taxed on $370,000 less exemptions, and the $230,000 difference is the benefit. The appraiser prints all three figures, just value, assessed value and taxable value, on the August TRIM notice and on the November bill. The benefit disappears when the property sells: the buyer is assessed at just value on the next January 1 and starts a new cap from there. That is why the same house can carry two very different tax bills a year apart, and why a buyer should never estimate the property tax from the seller’s bill.

The cap applies to the homestead parcel and to the owner who holds the exemption. Adding a spouse to the deed does not reset it. Transferring the house to a revocable living trust does not reset it if the owner keeps a beneficial interest and the trust is set up correctly. Transferring to the children, or to an LLC, does, and so does an inheritance by someone who was not already on the exemption, apart from a surviving spouse.

Portability: taking the cap to the next house

Since 2008 an owner who sells a homestead and buys another in Florida can carry the Save Our Homes benefit to the new house, up to $500,000, as long as the new homestead is established within three years of January 1 of the year the old one was abandoned. The mechanics depend on direction. Moving up, to a house with a just value equal to or higher than the old one, the full benefit transfers: a $230,000 benefit on the old house becomes a $230,000 reduction in the new house’s assessed value. Moving down, the benefit transfers in proportion: if the old house was assessed at 62% of its just value, the new house starts at 62% of its just value, whatever the dollar amount works out to.

Portability is applied for, on Form DR-501T, Transfer of Homestead Assessment Difference, filed with the new homestead application by March 1. The old county has to certify the benefit to the new one, which is why both addresses go on the form. Spouses who divorce or former co-owners who split can designate how the benefit is shared on Form DR-501TS before either applies. The three-year window is counted in tax years, not from closing to closing, so an owner who sold in March 2024 and rents until the right house turns up has through January 1, 2027 to establish the new homestead and still port.

The exemptions on top

A handful of additional exemptions stack on the homestead for people who qualify, and all of them are applied for through the same property appraiser. The most common:

Seniors with limited income. An owner 65 or older on January 1 whose household adjusted gross income, every resident of the home counted, is at or below $38,686 for 2026 ($37,694 for 2025) can get up to $50,000 more off the county or city taxable value, but only where the county or city has adopted the exemption by ordinance and only in the amount it chose. Sarasota County, for example, grants $5,000 at the county level while the City of Sarasota grants the full $50,000. The application is Form DR-501SC, a sworn statement of household income, due March 1, with copies of the federal returns of everyone in the house by June 1 (verify). The income test is applied every year.

Long-term senior residents. The same income-tested owner who has lived in the home for at least 25 years, where the just value is under $250,000, can get an exemption equal to the entire assessed value for county or city taxes, again only where adopted locally. It wipes out the county portion of the bill but not the school levy.

Widows and widowers. A $5,000 exemption for a surviving spouse who has not remarried; the amount was raised from $500 in 2023. Disabled veterans get a $5,000 exemption for a service-connected disability of 10% or more, and a total exemption for a permanent, total service-connected disability; combat-disabled veterans 65 or older get a percentage discount matching their disability rating. Totally and permanently disabled owners, blind owners, first responders disabled in the line of duty, and surviving spouses of first responders and service members killed in the line of duty have their own exemptions, some of them total. The property appraiser’s exemption page lists each with its form.

What costs people the exemption

The exemption is lost, and the cap with it, when the house stops being the permanent residence. Renting the whole house for more than 30 days a year, two years running, is treated as abandonment; renting a room while living there is not. Claiming a residency-based benefit elsewhere, a homestead exemption in another state, a resident tuition rate or a resident hunting license, can be used as evidence against Florida residence. Moving a parent into a nursing home does not end the parent’s homestead as long as the house is not rented and the parent intends to return.

The penalty for claiming an exemption without being entitled to it is steep: back taxes for up to ten years, a 50% penalty, and 15% interest, with a lien on the property. Appraisers run data-matching against driver’s license, voter and other states’ exemption records, and the snowbird who kept the Florida homestead while actually living in Ohio is the standard case.