Florida limits how much your property’s assessed value can rise from one year to the next. If the home is your primary residence with a homestead exemption, the assessed value cannot go up by more than 3 percent or the change in the Consumer Price Index, whichever is lower. For 2026, the CPI figure is 2.7 percent, so that becomes the effective ceiling. Every other kind of property in Florida, including rentals, second homes, and commercial buildings, is capped at 10 percent per year, with one important exception for school taxes.
The 3% Save Our Homes Cap on Primary Residences
The Florida Constitution sets the annual increase for a homesteaded property at 3 percent or the percentage change in the CPI, whichever is smaller.1Florida Senate. The Florida Constitution This is the Save Our Homes cap, and it applies to the assessed value used to calculate your tax bill, not the market value the appraiser records for the property.
For the 2026 tax year, the CPI change came in at 2.7 percent, making that the effective cap.2Florida Department of Revenue. Save Our Homes Annual Increase A home assessed at $200,000 in 2025 cannot be assessed higher than $205,400 in 2026, no matter how much its market value climbed during the year.
The cap covers the assessment used for all levies, including school district taxes. That’s a meaningful protection because school taxes typically make up a large share of a Florida property tax bill. Keep in mind, though, that the cap limits the assessment only. Local governments set their millage rates independently, so a rate increase can still push your total tax bill up even when your assessed value barely moves.
When a homesteaded property sells, the assessed value resets to full market value for the new owner as of January 1 of the following year.1Florida Senate. The Florida Constitution The new owner then starts building their own Save Our Homes benefit from zero. That reset is why long-term owners in appreciating neighborhoods often pay dramatically less than the family that just moved in next door.
The 10% Cap on Non-Homestead Property
Investment properties, second homes, and commercial real estate get a separate and weaker protection. Florida law caps the annual increase in assessed value for these properties at 10 percent of the prior year’s assessed value.3Florida Senate. Florida Statutes 193.1554 – Assessment of Nonhomestead Residential Property Two statutes divide the coverage. Section 193.1554 handles non-homesteaded residential properties with nine or fewer units, and Section 193.1555 handles commercial and other nonresidential real property.4Florida Senate. Florida Statutes 193.1555 – Assessment of Nonresidential Real Property
Here’s the catch that trips up owners: the 10 percent cap does not apply to school district levies.3Florida Senate. Florida Statutes 193.1554 – Assessment of Nonhomestead Residential Property For the school portion of the tax bill, non-homestead properties are assessed at full market value every year. If a rental’s market value jumps 25 percent in a single year, the non-school taxes work off the capped assessment, but the school taxes reflect the full increase. Landlords who budget only for a 10 percent rise can get an unpleasant surprise.
The non-homestead cap resets to full market value when the property changes hands or when its use changes. For commercial properties held in a business entity, a cumulative transfer of more than 50 percent of ownership can also trigger a reset.5Miami-Dade County Property Appraiser. Non-Homestead Cap
What Happens When You Add On or Build
Building a pool, enclosing a patio, or putting on an addition doesn’t wipe out your Save Our Homes benefit, but the improvement itself enters the tax roll at full market value. The county property appraiser adds the market value of the new work as of the first January 1 after it’s substantially complete. That one-time bump can push the total assessed value above the normal cap for that year. Starting the following year, the added value comes under the cap and grows at the same restricted rate as the rest of the assessment.
The same principle applies on the non-homestead side. Renovate a rental unit and the improvement value gets added at market, but future increases across the whole property remain subject to the 10 percent limitation. Routine maintenance and minor repairs don’t count as improvements. The work has to add value, not just preserve it.
Getting the Homestead Exemption That Unlocks the 3% Cap
The Save Our Homes cap only kicks in once you have a homestead exemption, so qualifying for the exemption is the gateway. You must own the property (or hold beneficial title in equity) as of January 1, make it your permanent residence, and apply with the county property appraiser.6Online Sunshine. Florida Statutes 196.031 – Exemption of Homesteads The application is Form DR-501, due by March 1 each year.7Florida Department of Revenue. Original Application for Homestead and Related Tax Exemptions
Alongside the assessment cap, the exemption itself removes value from the tax base. The first $25,000 of assessed value is exempt from all property taxes, and an additional exemption applies to assessed value above $50,000, covering every levy except school district taxes.6Online Sunshine. Florida Statutes 196.031 – Exemption of Homesteads Between the flat exemption and the cap working in tandem, long-term owners can end up paying tax on a fraction of what their home would sell for.
Proving permanent residency is where most of the scrutiny falls. The property appraiser’s office looks for a Florida driver’s license and vehicle registration matching the property address, and voter registration at the same address strengthens the claim. Permanent U.S. residents with a green card can qualify if they live in Florida full-time. Temporary visa holders and seasonal residents generally do not meet the permanent residency requirement.
How the Cap Can Disappear
Renting out a homesteaded property is the most common way people accidentally lose the cap. Under Florida law, renting all or substantially all of a homestead-exempt home constitutes abandonment of the homestead.8Online Sunshine. Florida Statutes 196.061 – Rental of Homestead to Constitute Abandonment Once abandoned, the assessment resets to market value and the cap goes away until you move back in and reapply.
There is a narrow safe harbor. If you rent the property for no more than 30 days per calendar year for two consecutive years, an abandonment after January 1 won’t affect the exemption for that tax year.8Online Sunshine. Florida Statutes 196.061 – Rental of Homestead to Constitute Abandonment Active-duty military members transferred under orders also get an exception, with valid military orders preserving permanent residency status for the service member and spouse.
Selling the property resets the assessment to market value for the new owner. Moving out and using another home as your primary residence, without properly transferring the benefit, also ends the cap on the old place.
Taking the Benefit With You: Portability
Florida lets you carry your accumulated Save Our Homes benefit to a new primary residence. To use this feature, called portability, you must establish a new homestead exemption within three calendar years of January 1 of the year you left the old one. That’s three years from the January 1 date, not from the sale date, which is a distinction that catches people off guard.9Florida Department of Revenue. Save Our Homes Assessment Limitation
The amount you can transfer depends on whether the new home is worth more or less than the old one:
- Moving to a higher-value home: the full difference between the old home’s market value and its capped assessed value transfers to the new property, up to a maximum of $500,000. If the old home had a market value of $400,000 and an assessed value of $300,000, you’d transfer $100,000 in savings to the new home’s assessed value.10Online Sunshine. Florida Statutes 193.155 – Homestead Assessments, Limitations on Increases
- Moving to a lower-value home: the benefit is reduced proportionally. Divide the new home’s market value by the old home’s market value, then multiply by the old home’s assessed value to get the new assessed value. If the old home was worth $250,000 with a $150,000 assessed value and the new home is worth $150,000, the math is $150,000 ÷ $250,000 × $150,000 = $90,000 new assessed value, preserving $60,000 in savings rather than the original $100,000.11Miami-Dade County Property Appraiser. Portability Calculations
Either way, the transferred benefit is capped at $500,000.10Online Sunshine. Florida Statutes 193.155 – Homestead Assessments, Limitations on Increases File Form DR-501T (Transfer of Homestead Assessment Difference) with the new homestead exemption application by March 1.12Florida Department of Revenue. Transfer of Homestead Assessment Difference The form asks for the parcel identification number of the previous home and the date of sale. If two people who each had a homestead exemption combine into one household, only the larger of the two benefits can be ported, not both.