"Save Our Homes" (SOH) Amendment
As provided in Section 193.155(1), F.S., beginning in 1995, or the year after the property receives homestead exemption, an annual increase in assessment shall not exceed the lower of the following:
• Three percent of the assessed value of the property for the prior year; or
• The percentage change in the Consumer Price Index (CPI) for all urban
consumers for the preceding calendar year as initially reported by the U.S.
Department of Labor, Bureau of Labor Statistics.
Under "Save Our Homes," the assessed value of homestead property cannot increase more than 3 percent each year, unless construction or improvement occurs on the property. (The yearly limit varies based on the change in the CPI, but it cannot be more than 3 percent.) For most homesteads, this limitation results in an assessed value that is lower
than the market value of the home.
Currently, if you are a Florida homesteader and you buy a new home and make it your homestead, your new home will be assessed at market value the first year you own it.
Following the passage of Amendment 1 to the Florida Constitution on January 29, 2008, some or all of the difference between the old homestead's assessed value and its market value can be applied to the assessment of a new home in the first year it is owned. Then the "Save Our Homes" limit will apply each year after that.
How much of the difference between assessed and market value ("Save Our Homes difference") can be applied depends on how the value of the new home compares to the value of the old home.
If the new home's market value is the same or greater than the old home's market value, the entire difference will be applied to the new home, so that the difference between the market and assessed values of the new home will be the same as the difference between the market and assessed values of the old home.
If the new home's market value is less than the old home's market value, the entire amount of the difference will not be applied to the new home.
Instead, the new home's Save Our Homes difference will be the same percentage of its market value as the old home's difference is of the old home's market value. For example, if the old home's Save Our Homes difference is 40 percent of its market value, the new home's difference can be determined by multiplying 40 percent times the new home's
market value. Then subtract that amount from the market value to arrive at the assessed value.
Maximum deduction from market value: The amendment sets $500,000 as the maximum amount that can be subtracted from the market value of a homesteader's new home to determine the assessed value. The maximum applies no matter what the relationship of the new home's market value is to the old home's.
In addition to the portability provision noted above with SOH, the January 29, 2008, Amendment 1 also modified property tax in the following ways:
1. Increases the homestead exemption by exempting the assessed value between $50,000 and $75,000. This exemption does not apply to school district taxes.
2. Authorizes an exemption from property taxes of $25,000 of assessed value of tangible personal property. This provision applies to all taxes.
3. Limits the assessment increases for specified nonhomestead real property to 10 percent each year.
Property will be assessed at just value following an improvement, as defined by general law, and may be assessed at just value following a change of ownership or control if provided by general law. This limitation does not apply to school district taxes. This limitation is repealed effective January 1, 2019, unless renewed by a vote of the electors in the general election held in 2018.
Further, this revision:
1. Repealed obsolete language on the homestead exemption when it was less than $25,000 and did not apply uniformly to property taxes levied by all local governments.
2. Provides for homestead exemptions to be repealed if a future constitutional amendment provides for assessment of homesteads "at less than just value" rather than as currently provided "at a specified percentage" of just value.
3. Provides that the changes take effect upon approval by the electors and operates retroactively to January 1, 2008. The limitation on annual assessment increases for specified real property shall first apply to the 2009 tax roll.
S8 1588 /2008 Legislative Session
During the 2008 regular session, the Legislature passed SB 1588 as a "glitch bill" to amend several technical problems associated with Amendment 1. One such amendment was to specify that the supermajority vote requirement necessary to exceed the maximum millage rate is based on the total membership of the governing body rather
than the membership present at the meeting.
The bill contained a last-minute amendment to include a provision that would result in an additional loss of revenue for local governments. Under previous law, local governments were allowed, if they chose, to levy a millage rate in FY 2008-09 to recover the losses from the reduced tax base caused by Amendment 1 by a simple majority vote.
The amendment to SB 1588 changed the calculation of the "maximum" millage rate that a county, municipality or special district may levy by a simple majority vote for FY 2008-09 only. It provides that the millage rate for FY 2008-09 (the millage rate that can be levied by a simple majority vote) must be calculated as if the tax base had not been reduced by Amendment 1. This would cause the "maximum" millage rate to be reduced
to a rate below that of previous law.
Thus, if a local government experienced a 10-percent loss to its tax base resulting from Amendment 1, that government's simple majority vote "cap" would have been lowered by 10 percent, but offset partially by the change in per capita Florida personal income (+4.15 percent for FY 2008-09). In almost all cases, this meant that it would have required a 2/3 vote of the membership of the governing body for a local government to hold itself harmless from the effects of Amendment 1.
The maximum millage rate that may be levied by a 2/3 vote or unanimous vote of the membership of the governing body under existing law did not change. This means a taxing authority may levy a millage rate up to a rate that is 110 percent of the (traditional) rolled-back rate, plus the change in per capita Florida personal income (+4.15 percent for FY 2008-09), by a 2/3 vote of the membership of the governing body. Similarly, a taxing authority may levy a millage rate in excess of 110 percent of the (traditional) rolled-back rate, plus the change in per capita Florida personal income (+4.15 percent for FY 2008-09), by a unanimous vote of the membership of the governing body.
In future years, FY 2009-10 and beyond, the maximum millage rate that may be adopted by a simple majority vote of the membership of the governing body, is the traditional rolled-back rate, plus the change in per capita. Florida personal income as published by the Office of Economic and Demographic Research by April 1 of each year.
Furthermore, the definitions used in the TRIM law, such as the definition of the "rolled-back rate," did not change. This means the existing definition of "rolled-back rate" in the TRIM law is still the threshold for the rate that constitutes a "tax increase" subject to the advertising requirements in FY 2008-09 and beyond.