Downsizing From a Long-Held Central Florida Home? Take Your Save Our Homes Benefit With You

A lot of the people I talk with about selling have been in the same house for twenty or thirty years: a family home in Winter Park, a pool home in The Springs or Sweetwater Oaks, a place in Sabal Point the kids grew up in. I’ve lived in Central Florida since 1978, so I know how those conversations go. The kids are gone, the yard is a lot of work, and something smaller near Park Avenue or closer to family starts to sound right.

Before you list, there is one number worth understanding, because it can change the property tax bill on your next home by a meaningful amount. It is your Save Our Homes benefit, and Florida lets you take some or all of it with you. That is called portability.

What you have built up without noticing

Once a Florida home has a homestead exemption, its assessed value can only rise by 3% a year or the change in the Consumer Price Index, whichever is lower. Market value does what the market does. Over a long ownership, the two numbers drift apart, and the gap between them is your Save Our Homes benefit. You are taxed on the lower assessed value, not the market value.

For a house bought in the 1990s or early 2000s in Winter Park, Maitland, or Longwood, that gap can be large. You can see both numbers on your TRIM notice (the proposed tax notice that arrives each August) or on your parcel page with the Orange County or Seminole County Property Appraiser. Subtract assessed value from just (market) value and you have a rough idea of what you have built up.

How much of it moves with you

Portability lets you transfer that benefit, up to $500,000, to a new Florida homestead. How much moves depends on whether you are buying up or buying down. The Seminole County Property Appraiser’s own example is a good way to see it:

• Old home: just value $400,000, assessed value $300,000. The benefit is $100,000.
• Buying up (new home worth more): you may bring the full $100,000. A $500,000 new home would be assessed at $400,000.
• Buying down (new home worth less): you bring a proportion. Here the benefit is 25% of the old home’s just value, so a $250,000 new home gets 25% of $250,000, or $62,500, and is assessed at $187,500.

That proportional rule is the part downsizers most often miss. You do not lose the benefit by buying smaller, but you do not carry the whole dollar amount either. If you are weighing a condo against a smaller single-family home, it is worth running both through that math before you decide.

The calendar is the part that bites

Portability is not automatic, and it runs on Florida’s January 1 property tax calendar.

• You qualify for a homestead exemption on a home you own and live in as your permanent residence on January 1. A home you close on this fall and move into before the end of the year can be your homestead for 2027.
• You apply with the property appraiser in the county where the new home is, by March 1. For a move this year, that means March 1, 2027.
• Portability takes its own form, the DR-501T, filed along with the regular homestead application (DR-501). Your old county certifies the benefit amount, so moving from Winter Park in Orange County to Longwood or Lake Mary in Seminole County works fine.
• You have to establish the new homestead within three years of January 1 of the year you left the old one, not three years from the sale. Seminole County’s example: sell in February 2024, and you need to be in a new homestead by December 31, 2026.

If you plan to rent for a while, travel, or wait for the right house, mark that deadline on the calendar the day you close on the sale.

A few things that trip people up

• The exemption itself does not move. Only the benefit does. You still apply for homestead on the new home, along with any senior, widow or widower, veteran, or disability exemptions you qualify for.
• Everyone on the old deed has to give up the old homestead. If a co-owner stays in the old house and keeps the exemption, the benefit does not transfer the way you might expect. After a divorce, the benefit is generally split equally unless the final judgment says otherwise.
• The listing’s tax figure is the seller’s, not yours. The taxes shown on a listing reflect the current owner’s exemptions and assessed value. Your bill will be figured on your own numbers, so ask for an estimate based on your purchase price and your portability, not theirs.
• Overlapping closings need a plan. If you buy the new place before the old one sells, especially around January 1, call the property appraiser before you close, not after.

Rules can change, and every situation has its own details, so confirm yours with the property appraiser’s office. Both Orange County and Seminole County have staff who answer these questions every day. For legal or tax advice on your own situation, talk with your attorney or CPA.

Where I come in

When I sit down with a homeowner who is thinking about downsizing, we look at three things together: what the current home is likely to sell for, what the next home will cost to buy, and what the property taxes will look like on the other side once portability is applied. Getting the sale and the purchase in the right order, on the right side of January 1, is often worth more than a few thousand dollars on the price.

If you have been in your Winter Park, Maitland, Longwood, or Lake Mary home a long time and want to talk through the numbers, call or text me at 407-620-7785, or request a home value estimate.

Will LaValle, REALTOR® · RE/MAX 200 Realty · 1155 Louisiana Ave., Suite 110, Winter Park, FL 32789