Florida property tax caps can leave neighbors paying very different amounts

Two neighbors can owe very different taxes

Two Florida homes can sit side by side, sell for similar prices, and still carry very different property tax bills because assessed values and exemptions may differ greatly each year.

Florida’s Save Our Homes system limits annual assessment growth for qualifying homesteads. Over time, that can create large gaps between market value, assessed value, and taxable value for neighboring homeowners.

Save Our Homes creates the gap

After a Florida home receives a homestead exemption, its assessed value generally cannot rise faster than the Save Our Homes limit, even when market prices climb much faster over time.

That protected difference between market value and assessed value can grow over many years. A longtime owner may therefore have a much lower taxable value than a neighbor next door.

The 2026 cap is 2.7%

For 2026, Florida’s Save Our Homes cap is 2.7%. The annual assessment increase is limited to 3% or the applicable Consumer Price Index change, whichever is lower.

This cap applies to qualifying homestead assessments, not market values or tax rates. A home’s market value can rise sharply while its protected assessed value moves much more slowly over time.

A sale can reset the assessment

When a Florida homestead changes ownership, its assessed value generally resets to its just value on January 1 of the following year, unless a legal exception applies to it under law.

That reset explains why a buyer’s future tax bill can differ sharply from the seller’s bill. The seller’s years of accumulated assessment protection usually do not transfer automatically to buyers.

Homestead exemptions lower taxable value

Florida homeowners who qualify for the homestead exemption can receive a $25,000 exemption from all property taxes. A second exemption applies to assessed value above $50,000 for non-school taxes.

For 2026, that additional exemption rose to $26,411 after an inflation adjustment. Together, the exemptions can reduce taxable value, although school taxes receive different treatment under law in Florida.

Fun fact: Florida’s homestead exemption can apply to property held jointly, but the exemption may be divided among qualifying resident owners.

Portability can preserve some savings

Eligible Florida homeowners moving between homesteads may transfer some Save Our Homes assessment savings to the new residence through portability, which can significantly lower the new home’s initial assessed value.

For an upsized home, the transferable assessment difference can reach $500,000. The new homestead generally must be established within three tax years after abandoning the previous homestead in Florida.

Non-homestead property follows another cap

Florida limits annual assessment increases on many non-homestead properties, including certain rentals and vacation homes. For non-school tax levies, their assessed value increase is generally capped at 10% yearly statewide.

That protection is different from Save Our Homes and does not include the homestead exemption. Changes in ownership can also cause protected assessments to reset under Florida law after purchase.

Values can rise even when prices fall

A homesteaded property’s assessed value can sometimes increase even when its market value declines or stays flat, as long as the assessed value remains below the home’s just value over time.

This process is often called recapture. The annual increase still cannot exceed the applicable Save Our Homes limit, and assessed value can never rise above just value in the end.

Tax rates still shape the final bill

Florida property tax bills depend on more than assessed value. Taxable value is multiplied by local millage rates set by counties, cities, school boards, and other taxing authorities across Florida.

That means two homes with similar taxable values can still face different bills if they sit in different taxing districts. Local fees and non-ad valorem assessments can differ as well.

Little-known fact: Homeowners must generally own and occupy the property as a permanent residence on January 1 to qualify for the homestead exemption.

School taxes follow different exemption rules

The first $25,000 homestead exemption applies to all property taxes, including school taxes. The additional inflation-adjusted homestead exemption applies only to non-school property tax levies statewide under Florida law.

For 2026, the second exemption reaches $26,411. Because school taxes do not use that extra exemption, taxable value for school purposes can exceed non-school taxable value on tax bills.

Improvements can raise assessed value

Save Our Homes does not freeze a property’s assessment forever. New additions or major improvements can be assessed at just value and added to the home’s protected assessment after construction.

The new portion enters the assessment at just value after substantial completion. In later years, qualifying homestead assessments again follow annual cap rules, including that added value going forward, too.

The TRIM notice explains the numbers

Each year, Florida property owners receive a Truth in Millage notice showing proposed property taxes, assessed value, exemptions, taxing authorities, and information about upcoming public budget hearings across the state.

The notice helps owners compare market, assessed, and taxable values before final bills arrive. It also shows which local governments and districts are responsible for proposed taxes for each property.

Curious how a new proposal could reshape property taxes for Florida homeowners? Explore the details: Florida homeowners could see property taxes disappear under the new proposal.

Buyers should not copy the seller’s bill

A seller’s current property tax bill may be a poor guide for a buyer’s future bill because ownership changes can reset assessments and remove the seller’s exemptions the next year.

Before buying, shoppers can check the county property appraiser’s records, estimate taxes using current millage rates, and ask about homestead eligibility and portability for their situation before making an offer.

Wondering what Florida’s property tax debate could mean for local communities? See how lawmakers in Florida aim to reduce property taxes, but schools could feel the impact.

This slideshow was made with AI assistance and human editing.

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