Save Our Homes, Portability, and the Year-Two Property-Tax Reset: A South Florida Luxury Buyer’s Guide
Quick Summary
- Taxes often reset after you buy
- Homestead caps assessed growth at 3%
- Portability can move up to $500k
- Renovations can trigger reassessment
The luxury buyer’s tax blind spot: the year-two reset
South Florida real estate is priced in lifestyle and scarcity, but owned under very specific statutes. For many luxury buyers, the first real surprise arrives in year two, when the county property appraiser resets assessed value after a change in ownership and the tax bill no longer resembles the seller’s.
In Florida, a homesteaded property can benefit from years of capped assessed-value growth. That history is not transferred to you simply because you bought the home. When ownership changes, the accumulated benefit is typically removed and the property is assessed at just value as of the following January 1. The result is a gap between what you saw in public records during due diligence and what you will pay once your ownership is reflected.
This is why sophisticated buyers treat property-tax modeling as part of acquisition strategy, alongside financing, insurance, and renovation scope.
Save Our Homes (SOH), in plain English
Save Our Homes is the assessment limitation that makes long-held Florida homesteads feel unusually “sticky.” If a property qualifies for the homestead exemption, annual increases in assessed value are capped at the lesser of 3% or the annual change in CPI.
Two practical points matter in the luxury segment.
First, SOH is an assessment cap, not a tax cap. Millage rates can move, exemptions can change, and improvements can be assessed separately.
Second, SOH is tied to homestead status. It generally applies only to a property receiving the homestead exemption, meaning the owner’s permanent Florida residence, not a second residence used seasonally, and not an investment property.
If you are buying a primary residence in Miami or Miami Beach, SOH can be one of the most effective long-term stabilizers of carrying costs. If you are buying a pied-à-terre, your underwriting should assume a different framework from day one.
The homestead exemption after Amendment 5: small numbers, meaningful leverage
Homestead is not only about the SOH cap. It is also a direct reduction of taxable value. Florida’s homestead exemption reduces taxable value by up to $50,000, structured as:
- The first $25,000 that generally applies to all ad valorem taxes, including school taxes.
- A second tier that applies only to non-school levies.
Beginning January 1, 2025, Florida’s Amendment 5 indexed the second tier to inflation rather than leaving it fixed. For tax year 2025, that inflation-adjusted second-tier amount was calculated at $25,722, bringing the combined total to $50,722.
At ultra-premium price points, the dollar amounts are not the headline. Eligibility and timing are. Homeowners generally must file for the homestead exemption by March 1 of the year they want it to begin, with limited late-filing allowed after TRIM notices are mailed. Miss the window and you can miss a full year of benefits.
Approach homestead as a compliance item, not a checkbox. Property appraisers can apply back taxes, penalties, and interest when a homeowner improperly receives, or fails to report changes affecting, a homestead exemption.
Portability: the quiet advantage for established Florida owners
Portability is the feature that turns SOH from a benefit you fear losing into an asset you can often carry forward. If you already own a Florida homestead and you are upgrading, downsizing, or relocating within the state, portability can allow you to transfer some or all of your accumulated SOH assessment difference to a new Florida homestead.
The transfer is capped at $500,000. The new homestead generally must be established within 3 years of January 1 of the year the prior homestead was abandoned. In practice, portability is often requested by filing your homestead exemption paperwork along with a separate portability form with the county property appraiser by March 1.
How much moves depends on your price-point shift. If the new homestead’s just value is at least the old homestead’s just value, the full SOH difference (up to the cap) can transfer. If you are downsizing, the transferable amount is prorated.
For established households moving between coastal South Florida markets, portability can materially offset appreciation, especially when the prior residence was held for many years.
Renovations and New-construction: where lifestyle decisions meet reassessment
Luxury ownership often includes personalization, and the tax system pays attention.
New construction and additions are assessed at full market (just) value as of the first January 1 after the improvements are substantially complete, before SOH limits apply again going forward. That means a major renovation can change the trajectory of your tax bill even if you already have homestead.
Widely reported consumer cases illustrate the scale of the risk. One account described a couple whose annual property tax bill increased from about $15,000 to more than $91,000 after renovations were treated as substantial improvements that triggered reassessment. Another report described a first-time Florida buyer of a newly built home whose monthly payment jumped by nearly $1,000 in year two after property taxes were reassessed.
For new-construction buyers, the lesson is straightforward: the initial tax escrow you see at closing may reflect land value or a prior assessment, not the stabilized reality. For renovation-minded buyers, the discipline is the same: treat scope, permitting, and timing as part of tax planning, not only design.
Second-home and investor ownership: the 10% assessment cap is not a shield
Many Miami Beach purchases are not homesteaded. A second-home used seasonally, or a residence held for rental income, generally does not qualify for the SOH cap. Florida’s non-homestead properties are typically governed by a different regime, a 10% cap on assessed-value growth.
That can sound protective, but it is not a guarantee that the bill will feel controlled. The 10% cap limits assessed-value growth; it does not cap millage-rate changes. Tax bills can rise because rates rise, even if assessed growth is constrained.
For luxury owners balancing privacy, flexibility, and residency planning, this is the moment to be clear about how the home will be used and titled. Homestead is powerful, but it is not compatible with every ownership goal.
A Miami Beach lens: precision matters more at the top
In Miami Beach, tax planning is part of the purchase standard because high price points make small statutory shifts translate into meaningful dollars.
If you are evaluating a primary residence in a branded building such as The Ritz-Carlton Residences® Miami Beach, your underwriting should assume a post-sale reset to just value, then model what homestead looks like if you establish Florida residency and file on time.
If you are buying a lifestyle-forward second residence, the behavior is different. An oceanfront address like 57 Ocean Miami Beach may suit an occasional-use pattern, but without homestead the tax profile should be evaluated under the non-homestead framework, with realistic expectations about millage changes.
For buyers who split time between global cities and want the service architecture of a private club, Casa Cipriani Miami Beach is the kind of property where title, residency, and long-term intent should be coordinated early so the tax outcome matches the lifestyle goal.
And in trophy corridors where holding periods can be long, Faena House Miami Beach reflects a broader truth: if you intend to make Florida your permanent base, the compounding value of SOH over time can be as strategic as any amenity.
A disciplined pre-closing checklist for property-tax clarity
Luxury buyers do not need more theory. They need a repeatable sequence before closing:
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Treat the seller’s tax bill as historical, not predictive. Underwrite to a post-sale reset to just value.
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Decide early whether the home will be a primary residence. Homestead and SOH require actual residency, and timing matters.
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If you already own a Florida homestead, price portability into the move. The $500,000 cap can materially change forward cost.
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If renovation is part of the plan, assume improvements can be assessed at full just value after completion, then capped thereafter.
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Calendar March 1. Homestead and portability filings often hinge on that date, with limited late-filing scenarios.
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Stay current on reform conversations. Florida lawmakers have floated property-tax reform proposals, and major changes often require voter approval.
This is the discreet advantage: understand the mechanics early, choose the right home, and choose the right ownership posture, rather than reacting to a surprise.
FAQs
What is Florida’s Save Our Homes cap? It limits annual increases in assessed value for a homesteaded property to the lesser of 3% or CPI.
Does SOH apply to a second residence? Generally no. SOH is tied to the homestead exemption, which is for your permanent Florida residence.
What happens to SOH when I buy a home? A change in ownership typically removes the seller’s SOH benefit and the property is assessed at just value as of the following January 1.
How much is the Florida homestead exemption? Up to $50,000, with a second tier that is now indexed to inflation; for 2025 the second tier was calculated at $25,722.
When do I have to apply for homestead? Generally by March 1 of the year you want it to begin, with limited late-filing after TRIM notices are mailed.
Can I be penalized for an improper homestead exemption? Yes. Property appraisers can apply back taxes, penalties, and interest when a homeowner improperly receives or fails to report changes affecting homestead.
What is portability? It allows eligible homeowners to transfer some or all of their accumulated SOH assessment difference to a new Florida homestead.
How much portability can I transfer and how long do I have? Up to $500,000, and the new homestead generally must be established within 3 years of January 1 of the year the prior homestead was abandoned.
How are renovations and additions treated for assessment? New construction and additions are assessed at full just value after they are substantially complete, before SOH limitations apply again going forward.
Do non-homestead properties have any assessment cap? Often yes. Many non-homestead properties fall under a 10% cap on assessed-value growth, but tax bills can still rise if millage rates increase.
For tailored guidance on South Florida luxury real estate, visit MILLION Luxury.
Million Luxury
Million Luxury
Welcome to MILLION, an exclusive luxury real estate boutique nestled in the heart of South Florida’s most desirable locations. Specializing in high-end properties, we provide a sanctuary for discerning clients including top Fortune 500 executives, affluent families, celebrities, and professional athletes from across the globe. At MILLION, we understand the unique demands of our elite clientele and offer a seamless blend of confidentiality and personalized attention. Our commitment to privacy is unwavering; we ensure that every transaction and interaction is handled with the utmost discretion and according to stringent confidentiality protocols. Our concierge service embodies the pinnacle of white-glove care, offering tailored assistance that transcends traditional real estate support.
