The Save Our Homes Cap in Florida: Three Percent a Year, and What Resets It
The Save Our Homes cap Florida homestead owners rely on limits assessed value growth to 3 percent a year or inflation, whichever is lower. It builds a gap between market and assessed value that resets at sale and ports at a move.
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The Save Our Homes cap Florida homestead owners rely on limits the growth of assessed value to 3 percent a year or the inflation rate, whichever is lower.
Over years it builds a gap between market and assessed value that resets when the home sells and ports when the owner moves. Our guide to the Florida homestead exemption covers the exemption it attaches to.
What it is
A constitutional amendment from 1992 capping annual assessment increases on homestead property.
The Florida Department of Revenue explains it.
Three percent or the change in the consumer price index, whichever is lower.
Applies to assessed value, not to millage.
The exemption reduces taxable value further.
How the gap builds
Market value rises with the market; assessed value rises at most 3 percent.
After a decade of appreciation, assessed value can sit far below market.
The gap is the accumulated benefit.
It is what ports.
See our guide to homestead portability in Florida.
What resets it
A sale: the buyer's assessment starts at market value the following January.
See our guide to property tax estimates for new buyers in Florida.
Losing homestead: renting the home out or moving away.
Adding a non-spouse to title can trigger partial reset.
Some transfers to trusts and spouses do not.
Recapture
In a year when market value falls or rises slowly, assessed value still rises up to 3 percent until it reaches market.
The cap works in both directions.
Owners in a flat market see assessments climb.
It is the cap catching up.
Still capped at 3 percent.
Improvements
A new addition, pool or major improvement is assessed at market value and added to the capped base.
See our guide to mother-in-law suite financing in Florida.
The cap then applies to the new total.
Repairs and replacements do not add value.
Permits are how the appraiser learns of improvements.
Effect on the mortgage
A long-held homestead has a low tax bill and a low escrow.
See our guide to escrow accounts in Florida.
A refinance keeps the cap; a sale does not.
A buyer must budget the reset, not the seller's bill.
See our guide to what PITI is in Florida.
Renting and the cap
Renting your homestead ends the exemption and the cap.
See our guide to the non-homestead cap in Florida.
The assessment resets to market the next January.
A rental with a 10 percent cap replaces it.
Model it before converting.
Spouses and the cap
Adding or removing a spouse does not reset the cap.
See our guide to adding a spouse to the mortgage in Florida.
A surviving spouse keeps it.
Divorce can split the ported benefit.
See our guide to divorce and your mortgage in Florida.
Trusts and the cap
A transfer to a revocable trust for your own benefit keeps the cap if the trust gives you a present possessory interest.
See our guide to trusts and mortgages in Florida.
An LLC transfer loses it.
Lady bird deeds keep it.
See our guide to lady bird deeds and mortgages in Florida.
Inheritance
Heirs who did not live there start fresh.
See our guide to inherited property with a mortgage in Florida.
An heir who moves in files a new homestead at market value.
A surviving spouse or minor child keeps the cap.
Estate planning decides who inherits and how.
The TRIM notice
Shows market value, assessed value and the difference.
See our guide to TRIM notices in Florida.
The difference is your accumulated benefit.
Appeal market value if it is high; the cap protects assessed value regardless.
Read it every August.
Buying a long-held home
The seller's low bill is the seller's.
See our guide to buying a home near retirement in Florida for buyers who often meet this.
Your bill resets to market.
Ask the lender to escrow on the reset estimate.
The jump surprises buyers who used the listing's tax figure.
Portability
Moving within Florida carries the gap, up to $500,000, to the next homestead.
See our guide to homestead portability in Florida.
File within three years.
It is the cap's escape valve for long-time owners who want to move.
Without it, moving would mean a full reset.
The policy debate
The cap shifts tax burden from long-held homesteads to new buyers and non-homestead owners.
Neighbours pay very different bills on similar homes.
Amendments have adjusted portability and the non-homestead cap.
The core 3 percent cap has stood since 1995.
It is not going away.
A worked example
A home bought fifteen years ago; market value has doubled; assessed value has risen under 3 percent a year.
The tax bill reflects the capped figure.
A buyer next door on a similar home pays on full market value.
The owner moves and ports the gap to a larger home.
The new buyer of the old home resets to market.
Checking the cap was applied
The TRIM notice shows assessed value below market value on a capped homestead.
If the two are equal on a home you have held for years, something is wrong.
A missed homestead filing or an unnoticed title change are the usual causes.
Call the appraiser.
Corrections are possible for a limited number of prior years.
Where to start
Pull your TRIM notice and read the market-versus-assessed gap.
Protect it: keep homestead, avoid non-spouse title changes, port it if you move.
Then start a conversation and we will keep the cap in view on any refinance or purchase.