Save Our Homes Cap: How Florida Limits Property Tax Assessment Growth

Save Our Homes: Florida’s Property Assessment Cap Explained

Florida’s Save Our Homes (SOH) constitutional amendment, passed by Florida voters in 1992 and effective January 1, 1995, is one of the most powerful property tax protections in the United States for long-term homeowners. It limits annual increases in the assessed value of homesteaded Florida properties to the lesser of 3% or the change in the Consumer Price Index. In practice, this means that regardless of how fast the Florida real estate market appreciates, a homesteaded property’s taxable assessed value can rise no more than 3% per year from the prior year’s assessment.

How the Cap Accumulates: The Wealth-Building Math

The SOH cap creates compounding protection over time. In any year where Florida market appreciation exceeds 3%, the gap between actual market value (just value, in Florida tax terminology) and assessed value widens. This gap — the SOH benefit — represents the amount of market value that is shielded from taxation. The longer you own and the faster the market appreciates, the larger the protected gap becomes.

Concrete example with real Florida market data: a Tampa Bay homeowner purchased at $280,000 in 2012 and filed homestead exemption that year. Florida markets appreciated dramatically over the following decade — particularly in 2020–2022 when Tampa Bay saw 20–30% annual appreciation. By 2025, the home’s just value is approximately $650,000. With the SOH cap applied from 2013:

• 2013: $280,000 assessed (purchase year)
• 2014–2019: 3% annual increases = approximately $334,000 by 2019
• 2020: market up 8%, cap at 3% = $344,000 assessed vs. ~$430,000 just value
• 2021: market up 25%, cap at 3% = $354,000 assessed vs. ~$537,000 just value
• 2022: market up 28%, cap at 3% = $365,000 assessed vs. ~$687,000 just value
• 2023–2025: market moderates, assessed value slowly converges toward just value
• 2025: assessed approximately $385,000 vs. just value approximately $650,000

SOH benefit: $650,000 – $385,000 = $265,000 protected from taxation. At a 2.0% effective combined millage rate, this $265,000 protection saves approximately $5,300/year. A neighbor who purchased the same home in 2022 at $600,000 pays taxes on approximately $600,000 assessed value — approximately $12,000/year — versus the 2012 buyer paying on $385,000 assessed value — approximately $7,700/year. The 2012 buyer saves $4,300/year from accumulated SOH protection.

What Happens When You Sell: The Reset

The SOH cap is attached to the homestead exemption, which is attached to you as the owner-occupant. When you sell your homesteaded Florida property, the accumulated SOH benefit disappears for that property. The new buyer is assessed at the purchase price (just value at time of purchase) and must build their own SOH protection from scratch. This is why looking at the seller’s current property tax bill is misleading for buyers — the seller’s low tax bill may reflect 10–15 years of accumulated SOH cap, which the buyer will not inherit.

Before making an offer on any Florida property with a long-term owner, request an estimate of the property’s post-sale assessed value from the county property appraiser. Most Florida county property appraiser websites have a tool for this — input the proposed purchase price and see the estimated new assessed value and projected tax bill. The difference between the current owner’s tax bill and the projected new-owner tax bill can be $3,000–$8,000/year on properties in rapidly-appreciated markets.

Portability: Transferring Your SOH Benefit

Florida’s portability provision allows homeowners who sell their Florida homestead and purchase a new Florida primary residence within 2 years to transfer up to $500,000 of their accumulated SOH benefit to the new home. This reduces the assessed value of the new homestead by the transferred amount, providing immediate tax protection rather than requiring years to rebuild.

How portability is calculated: the SOH benefit transferred equals the difference between the sold property’s just value and its assessed value, up to $500,000. If your sold home had a $350,000 just value and a $180,000 assessed value, your SOH benefit was $170,000 — fully transferable (under the $500,000 cap). If you purchase a new $500,000 Florida home, the new assessed value is $500,000 – $170,000 = $330,000. Annual tax savings at 2.0%: approximately $3,400/year immediately.

Portability application: file Form DR-501T with your new county’s property appraiser at the same time as your new homestead exemption application, no later than March 1 of the year following your new purchase. The deadline is strict — missing March 1 means waiting another full year and potentially losing the portability benefit if the 2-year window closes. If you’re moving within Florida from a property with significant SOH accumulation, portability planning should begin before you sell, not after.

SOH and the New Buyer’s Decision-Making

For buyers evaluating Florida purchases, the SOH dynamic creates an important affordability consideration. Florida’s property taxes look modest in aggregate statistics (0.80–1.10% effective rate statewide), but those statistics include long-term homeowners with large accumulated SOH benefits. New buyers in appreciating markets pay taxes on their full purchase price — which may produce effective rates significantly higher than the neighborhood average suggests.

High-appreciation Florida markets where new buyers face the sharpest SOH-related tax step-ups compared to long-term neighbor tax bills:

• Miami-Dade County: median appreciation 2020–2024 approximately 60–80%. New buyers in Coral Gables, Coconut Grove, or Brickell pay taxes on 2024 purchase prices; neighbors from 2010 pay on assessed values that may be 40–50% lower.
• Broward County (Fort Lauderdale area): similar dynamic. Hollywood, Pompano Beach, and Hallandale Beach have seen dramatic appreciation with significant SOH benefit accumulation for existing owners.
• Hillsborough County (Tampa): 2020–2022 appreciation of 60%+ in some submarkets. New Tampa and Wesley Chapel new-construction buyers may actually have lower tax bills than long-term existing homeowners whose SOH has slowly converged — but buyers of existing homes in established neighborhoods face the full post-purchase reassessment.
• Pinellas County (St. Petersburg, Clearwater): rapid appreciation combined with insurance market challenges make the full carrying cost calculation essential before closing.

The practical recommendation for Florida buyers: always get a projected first-year property tax estimate based on your purchase price from the county property appraiser — not from the current tax bill, not from the listing agent’s estimate, and not from a national mortgage calculator that uses average rates. The actual post-purchase tax bill is the number that matters for your monthly PITI and qualifying income calculations.