The most expensive misunderstanding in Florida real estate
When a Florida homeowner lists their property, the county appraiser's website shows their current assessed value — often dramatically lower than market value, thanks to years of Save Our Homes (SOH) cap protection. Buyers see a tax bill that looks manageable. What they don't realize: that tax bill disappears the day the deed transfers.
What is the Save Our Homes cap?
Under Article VII, Section 4 of the Florida Constitution, the assessed value of a homesteaded property cannot increase by more than 3% per year (or CPI, whichever is lower). Since inflation has been below 3% most years, a Florida homeowner who bought in 2004 and homesteaded has seen their assessed value barely budge — even as market value tripled.
A property bought for $180,000 in 2004 might have a 2026 assessed value of ~$210,000, while market value is $650,000. The owner pays taxes on $210k (minus the $51,411 homestead exemption = $158,589 taxable). At 20.5 mills: $3,251/yr.
What happens when you buy it
When ownership transfers, the SOH cap resets entirely. Your first-year assessed value equals the just (market) value — approximately your purchase price. You then begin accumulating your own SOH benefit starting from zero.
For a $650,000 purchase with homestead, the calculation:
- First-year assessed value: $650,000
- Minus 2026 homestead exemption: $51,411
- Taxable value: $598,589
- At 20.5 mills (Miami-Dade): $12,271/yr
You go from what looks like a $3,251/yr tax bill to $12,271/yr — a $9,020 annual increase that is almost never explained to buyers.
The 2026 Florida reform situation
On May 27, 2026, Governor DeSantis called a special legislative session proposing to eliminate homestead property taxes through a $250,000 exemption — a change that would zero out taxes for roughly 60% of Florida homeowners. This requires a 60% supermajority in both chambers to reach the ballot, then 60% voter approval in November 2026.
As of June 2026, nothing has changed. The 3% SOH cap and $51,411 exemption remain current law. Budget based on current law; use our reform scenario calculator to see the potential upside.
How to protect yourself as a buyer
- Run the actual reassessment math before making an offer. Use the county property appraiser's millage rate and your purchase price.
- Ask for the seller's TRIM notice — the annual proposed tax notice sent every August. It shows assessed value vs. market value, revealing the gap.
- Factor in your real tax bill when calculating what you can afford. Lenders use property tax in their debt-to-income calculations, but they often use the current tax bill — not your post-reassessment bill.
- Consider negotiating on price to account for the first-year tax jump, especially if the seller has held for 15+ years and the gap is large.
