On January 29, 2008, voters approved Amendment 1 and its increased Homestead benefits in an attempt to alleviate the property tax burden plaguing our State. Those with homesteaded properties will gladly welcome the increased exemption when their property tax bill arrives. However, it is the often overlooked and under utilized Portability component of Amendment 1 that has the potential to offer the greatest benefit to homeowners.
Amendment 1 Portability enables a homeowner to transfer their accumulated “Save Our Homes Benefit” from their current homesteaded property to that of a new homesteaded property. For instance, your home may be worth $500,000, but because of the “Save Our Homes Benefit”, the assessed value may only be $400,000. You therefore would have $100,000 of accumulated “Save Our Homes Benefit” that could be transferred to a new homestead. This $100,000 would be applied exactly like the current homestead exemption, as it would be used to reduce the assessed value of the property on which your taxes are based.
Although this Portability benefit is most viable for those selling and buying a new homestead, the Portability provided by Amendment 1 may also be used for those with multiple property holdings, especially in instances where the
millage rate differs dramatically amongst
the property holdings.
As evidenced above, the Portability component has the potential to be a tremendous cost saver and boost to the real estate market. However, unlike the increased homestead exemption portion of Amendment 1, which will be applied automatically, individuals must take the extra step and complete the process for Portability. It should be noted that the application of Portability is retroactive to January 1, 2007. Thus, individuals who sold their homes in 2007 can still transfer their “Save Our Homes Benefit” to a new homestead if the new homestead is established by January 1, 2009.
Hopefully this brief analysis of the Portability component of Amendment 1 has provided some insight into a cost saving tool available in today’s market. It should not be viewed as an attempt to offer investment advice, but rather as a candid look into the depths of Amendment 1. If you have any questions about Amendment 1 and Portability, or any other real estate issues, please call our office. We are dedicated to providing sound legal advice, and are here to assist you in all of your real estate endeavors.