Florida's Homestead Rules, and What They Do Not Do for a Relocating Buyer

Buyers relocating to Florida tend to arrive with two facts and one assumption. The facts are that Florida levies no state income tax and that it has a homestead exemption. The assumption is that both benefits show up on closing day. The first is true. The second is not, and the gap catches people who have already signed.

This is a description of published rules, not tax advice. What any of it means for a particular household is a question for the county property appraiser and your own tax adviser, and the numbers below are the state's, not ours.

What Save Our Homes actually caps

Save Our Homes limits how fast the assessed value of a Florida homestead can rise. After the first year a home receives the exemption, the assessment cannot increase by more than three percent or the change in the Consumer Price Index, whichever is lower ¹. For 2026 that CPI figure is 2.7 percent ².

The accumulated gap between that capped assessed value and the property's market value is the benefit, and it is why a neighbour who bought twenty years ago can pay markedly less tax on a similar house. Note the timing in the rule: the cap starts working the year after the exemption is granted, not the year you buy.

“The cap protects the years after you arrive. It does nothing about the year you arrive in.”

Portability, and who it is for

Portability lets an owner move an accumulated Save Our Homes difference from one homestead to the next. The detail that decides whether it applies to you is that both homesteads must be in Florida ¹. It is a mechanism for people moving within the state, not for people moving to it.

The transfer is also capped. The reduction from just value may not exceed $500,000, a limit fixed in Article VII, Section 4 of the Florida Constitution ⁶. It is a flat dollar amount and does not scale with the price of the home, so above a certain accumulated difference the cap rather than the benefit is what governs.

For anyone it does apply to, two deadlines matter and one of them is commonly misread:

• The new homestead exemption must be established within three years of January 1 of the year the previous homestead was abandoned. The Department is explicit that this is not three years after the sale [1].
• The transfer is filed on Form DR-501T alongside the homestead application, Form DR-501, with the county property appraiser. The filing deadline is March 1 [1].

A change of ownership also ends the benefit on the property being sold: the home is reassessed at just value the following January 1 ¹. That is the mechanism a buyer inherits, and it is why the tax line on a listing reflects the seller's history rather than the buyer's future.

The measure on the November ballot

Florida voters will decide a constitutional amendment in November 2026. If approved by at least sixty percent, it would raise the homestead exemption for non-school levies to $150,000 in 2027 and $250,000 in 2028, index both to inflation, and cut the assessment cap on non-homestead property, such as second homes, from ten percent to five ³.

One provision matters more than the headline for anyone reading this from another state. As written, a person who did not maintain a permanent residence in Florida as of December 31, 2026 receives the ordinary exemption first, and the increased amount only from the fifth year of exemption onward ⁵. The test is permanent residency rather than the date of a purchase. Where a particular residency date falls, and what it would mean, is a question for the county property appraiser and your own tax adviser.

Whether it passes is for the electorate, and this page does not speculate either way. The reason to understand it now is planning, not urgency.

What this means arriving from out of state

Put the three together and the picture is consistent. Portability needs a prior Florida homestead, which a buyer arriving from another state does not have. Save Our Homes begins capping the year after your exemption is granted, not on closing. And the expanded exemption, should it pass, asks for five years of residency first.

So the practical planning assumption for a first Florida purchase is the ordinary homestead exemption once you have applied and qualified, with the assessment cap taking effect afterwards. Budget the first year at the property's reassessed value rather than at the figure on the current tax bill. That single adjustment is what removes most of the surprise.

The application itself is Form DR-501, filed with your county property appraiser by March 1 ⁴. Qualification, timing and anything specific to your circumstances belong with that office and your tax adviser.

Relocation buyers on this coast usually have this conversation before the search rather than after. Our Space Coast relocation orientation covers the wider move, and relocation representation covers the search itself.