While the process of purchasing a home is usually daunting in and of itself, there are other related issues regarding property assessment that new homeowners or prospective buyers need to understand. Two of the most important are explained here:
Be aware that there could be significant changes in the property taxes on the home you are buying.
In Florida, state law (Save our Homes) limits the annual increase in the assessed value (not market value) of homesteaded property to 3% or the national consumer price index (CPI) whichever is less. However, when homesteaded property is sold, that limitation, or cap, is removed and the property is reassessed. This results in a new assessed value.
Therefore, if you purchase homesteaded property, the taxable value of the property can, and probably will, increase significantly the first year after sale. Especially if it has been owned and homesteaded for some time by the same owner. (Taxable value is the assessed value minus any exemptions.)
This increase is important to note as many property owners pay their taxes through mortgage companies and may be surprised by increases in their monthly payment if they are not aware of this fact.
Take advantage of Homestead Exemption.
A homestead exemption will save you money on your tax bill, and new homebuyers should take advantage of it. It will also establish a new value cap on your home. You may file for your exemption as soon as you have all the required documents.
Homestead exemption is a reduction of the assessed value of the property that is occupied as a home, by the property owner . Typically, qualified property owners are given a $25,000 reduction off the assessed value of their home.
Once you have a Homestead Exemption and there is no change in ownership, the exemption carries on to the next year automatically. There are also other exemptions available, such as senior citizen, widow/widower, and disability which may require annual filing.