Pay Less Property Tax

It’s 2022 and still before the due date of March 1st. You owe it to yourself to make sure you are taking advantage of every property tax exemption possible. Over the years, you can save tens of thousands of dollars. I’ll start with the easiest exemption.

Homestead Exemption

Each year, January 1 through March 1, the Miami-Dade Property Appraiser’s office allows homeowners to file for Homestead Exemption. This valuable deduction is only for a homeowner’s primary residence and once you file, it automatically renews each year. The exemption provides a $25,000 in assessed value for all taxing authorities and another $25,000 to all tax authorities (except the School Board).

Homestead Exemption also provides an additional valuable benefit of capping the annual increase of an assessed value to 3% or the Consumer Price Index (CPI), whichever is lower. Over a few years, this can save a homeowner a ton of money. Just looking at 2021 where some property values increased by more than 20%, those Homestead Exempt properties will only see an increase in their property taxes of 1.7% (the 2021 CPI rate). And, just like bank interest, capping each year can have a compounding and impressive effect on your tax saving over the years.

So, for brand new homeowners or those who moved to Florida from another areas, it is critical that you file for Homestead Exemption to start your years of tax savings! You can file online at: miamidade.gov/PaPortal/AutoOnlineFile/ExemptionOnlineMainMenu.aspx

Other Exemptions

If you are already a Florida homeowner, you might have turned 65 during 2021. If so, don’t forget to take advantage of the Senior Citizen Exemption! Savings vary based on your personal situation, but they can be significant. Further, if you are 65+ and lived in the same home for more than 25 years, you would be eligible for a Long-Term Resident Senior Citizen Exemption.

If you are deployed military, have a disability, are a disabled first responder, are a widow/widower, you have some property tax exemptions you can file for as well.

The Miami-Dade Property Appraiser, Pedro Garcia, sat down with me on January 6 on “The MiamiHal Real Estate Show” at the Miami’s Community Newspaper Studios to explain all of this and more in detail. You can watch this show at: miamihal.com/the-miamihal-real-estate-show/2022/1/6/episode-47

Beyond Exemptions

There are even more savings for homeowners in Florida who want to upsize, downsize or just move within the State. Known as portability, property owners with Homestead Exemption and an accumulated SOH Cap can apply to transfer (or "Port") the SOH Cap value (up to $500,000) to a new homestead property. This application is known as the "Transfer of Homestead Assessment Difference", and the annual deadline to file for this benefit and any other property tax exemption is March 1st.

Portability allows you to bring the years of accumulated property tax savings along with you (at least a percentage thereof) and it is meant to provide Floridians the freedom to choose the best housing for their situation without losing the tax standing they have earned over the years of being in Florida.

Here is an example of the savings a homeowner can expect for upsizing and downsizing, using the Portability Transfer benefit.

Portability allows you to take with you up to $500,000 in value protection from property taxation to your NEW homestead property or 50% (if you are downsizing - see below).  

UPSIZED PROPERTY EXAMPLE
Prior Home with “Save Our Homes” Protection
Market Value (as per the County Appraiser):  $250,000
Assessed Value:  $125,000  
Savings you take with you: $125,000 (250k - 125k)

NEW Home with “Save Our Homes” Portability Applied
Market Value (as per the County Appraiser):  $350,000
Savings Carried from Old Property:  $125,000
New Home Assessed Value:  $225,000 (350k -125k)

SAVINGS: $125,000 IN VALUE SHIELDED BY PORTABILITY!
 
DOWNSIZED PROPERTY EXAMPLE
Prior Home with “Save Our Homes” Protection
Market Value (as per the County Appraiser):  $250,000
Assessed Value:  $125,000  
Savings you take with you: $125,000 (250k - 125k)

NEW Home with “Save Our Homes” Portability
Market Value (as per the County Appraiser):  $225,000
Savings Carried from Old Property:  $112,500*
New Home Assessed Value:  $112,500 (225k - 112,500)

SAVINGS: $112,500 IN VALUE SHIELDED BY PORTABILITY!

* Savings capped exceed 50% of New Property Market Value. $125,000 to carry over is greater than 50% of the $225,000 Market Value of the New property which is $112,500. Portability allowed amount = $112,500
SAVINGS: $112,500 IN VALUE SHIELDED BY PORTABILITY!

There are also a number of other ratios that may need to be applied to truly get the exact value of the portability. You can look at the estimate from the State of Florida by visiting: https://www.miamidade.gov/PaPortal/AutoOnlineFile/ExemptionOnlineMainMenu.aspx

The Miami-Dade Property Appraiser’s Office is run more like a business than a governmental office. It allows Pedro Garcia to promise true customer service. During my show, he promised any Miami-Dade County resident that his office will answer your questions via phone on that call or get you a response within one business day. The Miami-Dade Property Appraiser’s Office phone number is 305-375-4712 and the very helpful website is at: miamidade.gov/pa/home.asp

One word of warning to heed. Garcia mentioned that the County is looking for people who are looking to defraud the State of due taxes. Penalties are stiff and his office has powerful automated tools to detect violators. “Some people make honest mistakes when initially filing or they fail to report a change that effects their eligibility,” said Pedro Garcia. “We’ll work with those people. But outright purposeful fraud will not be tolerated.”

When used right, the property tax exemptions are an incredible benefit to homeowners. Make sure you take advantage!