How Real Property Taxes Are Calculated in Florida

Real Estate Taxes in Florida and How They Are Calculated

Palm Beach County and the Treasure Coast

Property taxes throughout Florida – and Palm Beach county and the Treasure Coast are based on millage rates which are used to calculate your ad valorem taxes. One mil equals $1 for every $1,000 of taxable property value (which is after exemptions if applicable).

The millage rate for Boca Raton is 18.307 per $1,000 of value, so you are paying $18.31 for every $1,000 in taxable value. The county rate is generally 17.7544, so Boca’s rate is slightly higher.

Port St Lucie Millage rate is 24.0584 for 2021.

Florida Homestead Exemptions

In the State of Florida , the $25,000 homestead exemption is applied to the first $50,000 of the property’s assessed value if your property is your permanent residence and you owned it on January 1st of the tax year. This exemption applies to all taxes, including school districts taxes.

An additional exemption of up to $25,000 will be applied if the property’s assessed value is between $50,000 and $75,000. This exemption is not applied to school district taxes.

As an example, you need to have closed by December 31, 2021 and be able to state the home is your primary residence by January 1st of the year, eg 2022, to apply for the homestead exemption by March 1st, 2022 for the 2022 tax year. The property appraiser’s values are based on values in January of the year but the values and millage rates are not finalized and released until August of the year and taxes are due in November. There are discounts available if you pay by November.

If you have a mortgage with a lower down payment, the mortgage company will collect monthly and pay the taxes for you in November. Sometimes the lender has options with larger down payments to not include the taxes in your monthly payment by charging an add-on fee. If you pay cash, it is up to you to pay by November.

A $50,000 exemption can reduce your tax obligation quite a bit for a lower priced home, but it won’t make that much of a dent in a higher priced home. The advantage of a Primary Residence is the SOH cap each year to the increase in actual taxes.

Save Our Home Cap (SOH)

Homestead exemption also qualifies you for the 3% Save Our Homes Cap (SOH). In 1994 the State of Florida established a 3% Save Our Homes Cap (SOH) assessment limit on all residential properties that receive a homestead exemption.

The 3% SOH Cap limits any increase to the assessed value of a homestead exempt property for tax purposes to a maximum of 3% each year or the amount of the change in the Consumer Price Index, whichever is lower.

Properties are assessed at the Fair Market Value when a change of ownership occurs or you purchase a home, and in the first year it receives the homestead exemption. A good estimate to start is to calculate about 1 1/2 to 2% of the sales price for your base. As of the beginning of 2022, you see January 2021 values and taxes. 2021 Taxes will be assessed in January 2022, but not released until August 2022. So you will not see 2022 values and taxes until August 2022. Some assessed values increased 12 – 14% for 2021 taxes. Sales prices were up 18+% last year, so the assessed values can increase substantially for the August 2022 tax roll as well.

Once the exemption is applied for, the cap or base year is established, each year thereafter, the SOH cap applies. The 3% SOH Cap remains in effect as long as the property is homestead exempt or until the property is sold.