Save Our Homes Act
The Florida Constitution was amended effective January 1, 1995, to limit annual increases in assessed value of property with Homestead Exemption to three percent or the change in the Consumer Price Index, whichever is lower. No assessment, though, shall exceed current fair market value. This limitation applies only to property value, not property taxes.
When a house is sold, the cap and exemption are removed at the end of the calendar year, and taxes are calculated on the full market value, also called the Just/Market Value. The property will fall under the limitations of the Save Our Homes Cap the second year of the new owner’s Homestead Exemption. Therefore, if a property owner applies for and receives Homestead Exemption for 2013, the Assessed Value will be capped in 2014. To determine taxable value, any exemptions are subtracted from the Assessed Value to reach a Taxable Value, which is then multiplied by the annual Millage Rate set by the taxing authorities to reach the amount of tax due.
Because a change in property ownership will effectively “reset” the Capped Value to full market value, it is important to be aware when purchasing a home that benefits from the cap, that it can be expected that property taxes will increase the next year because the assessed value must be adjusted to equal current market value.
Credited source: https://www.pcpao.org/SOH.html