Florida’s Save Our Homes (SOH) Act awards significant savings to resident homeowners through homestead exemptions. In a nutshell, these exemptions grant resident home owners significant savings on their property taxes and limit the amount they can be raised.
Your Homestead Begins After Jan 1
Regardless of when you purchase your home, YOUR homestead eligibility begins after the next January 1. If you close on your new home after January 1, then you will not be eligible for your own homestead until the following year.
What if the home is not homesteaded?
If the home is not yet covered by a homestead exemption at the time of sale, you will be on the hook for the higher tax bill for that year. Keep in mind, that the prorated taxes through the day before closing will be paid by the seller and credited to you at closing to help you pay the taxes at year end when they're dur. However, it will still be that higher tax bill for the first year.
If you buy your home with a mortgage, your monthly payments will be reflective of that higher tax bill until the following year’s bill is generated with your homestead exemption. While you certainly wouldn’t want to avoid a house that doesn’t yet have a homestead exemption because you will be able to homestead it for yourself, you do need to plan for those higher costs for the first few months that you own the home.
Furthermore, if you're considering purchasing around the end of the year, and the home is not yet homesteaded, it is to your benefit to close by December 31 if you can in order to realize your homestead savings as soon as possible.
Purchasing a Home that is Already Homesteaded
When a house is purchased that is already covered by a homestead exemption from the previous owner, the new owner will benefit from that reduced tax bill for the first year. Provided the new owner applies in a timely fashion for their own homestead exemption, they will have their own homestead exemption in place for the following year.
In such a situation, you will likely have a higher tax bill than the owners before you by the next year, but it shouldn’t be too drastic.