Taxes Affecting Real Estate: Homestead, Save Our Homes & Tax Bills

Taxes Affecting Real Estate is 3% of the Florida sales associate exam. The questions lean heavily on Florida's property tax system: the homestead exemption, the Save Our Homes cap, and the calendar for paying a tax bill. Buyers ask about these at every showing, so the material is worth knowing for practice as well as for the exam.

Just value and the January 1 snapshot

The county property appraiser must arrive at just valuation. Factors to consider include the present cash value, meaning what a willing purchaser would pay a willing seller in an arm's-length cash transaction, and the property's highest and best use. Status is fixed on January 1: the homestead exemption goes to a person who, on January 1, holds title and makes the property his or her permanent residence.

The homestead exemptions

• First $25,000 of assessed value is exempt from all taxes, including school taxes.
• An additional exemption of up to $25,000 applies to assessed value greater than $50,000, for all levies other than school district levies. This $25,000 is adjusted every January 1 for inflation (CPI) when the change is positive, so the current figure can be slightly higher.
• Apply to the property appraiser on or before March 1. Missing the deadline waives the exemption for that year, subject to the statute's exceptions.
• Not more than one exemption is allowed to any individual or family unit, or for any residential unit.
• Separately, a widow, widower, blind person or totally and permanently disabled Florida resident gets an exemption on property worth $5,000 (§ 196.202).

Save Our Homes, portability and the non-homestead cap

After the first year of homestead, the assessed value is reassessed every January 1. The increase may not exceed the lower of 3% of the prior year's assessed value or the change in the CPI (§ 193.155(1)). Assessed value can never exceed just value. After a change of ownership, the property is reassessed at just value the following January 1. That is why the buyer's tax bill is often higher than the seller's, and why the property tax disclosure summary warns buyers.

Portability: a homesteader who moves can transfer the Save Our Homes benefit to a new homestead, capped at $500,000. Non-homestead residential property has its own cap. Annual increases in assessed value may not exceed 10% of the prior year's assessed value.

SOH example: last year's assessed value is $200,000 and the CPI rose 4.1%. The cap is the lower figure, 3%, so this year's assessed value may be at most 200,000 × 1.03 = $206,000, even if just value jumped to $260,000.

Calculating the bill

Tax notices list millage rates in dollars per $1,000 of taxable value, so 1 mill = $1 per $1,000 = 0.001. Example: assessed value is $300,000 with homestead, and the school levy is 5.5 mills. Only the first $25,000 exemption applies to school taxes, so school taxable value = 275,000, and 275,000 × 0.0055 = $1,512.50. For non-school levies, using the $25,000 base amount of the additional exemption: taxable value = 300,000 − 25,000 − 25,000 = 250,000. At 12 mills that is 250,000 × 0.012 = $3,000.00.

Agricultural classification (the greenbelt law, § 193.461) is available only for land used primarily for bona fide agricultural purposes, meaning good-faith commercial agricultural use.

Paying the bill: discounts, delinquency and tax certificates

• Taxes are due November 1 and become delinquent April 1 of the next year.
• Early-payment discounts are 4% in November, 3% in December, 2% in January, 1% in February, and 0% in March. Example: a $4,000 bill paid in November costs 4,000 × 0.96 = $3,840.
• Taxes are a first lien, superior to all other liens, from January 1 of the tax year.
• Delinquent taxes lead to a tax certificate, which bears interest of at most 18% a year. After 2 years from April 1 of the year the certificate was issued, the holder may apply for a tax deed.

Federal income taxes for homeowners

• Sale of a main home: exclude up to $250,000 of gain, or $500,000 for a married couple filing jointly. This requires ownership and use as a residence for at least 24 months of the 5 years before the sale.
• Mortgage interest: for debt taken out after December 15, 2017, interest is deductible on up to $750,000 of qualifying debt ($375,000 if married filing separately).
• Transfer taxes (doc stamps) are not deductible on a personal home. They go into the buyer's basis or reduce the seller's amount realized.

Where this shows up on the exam

Taxes Affecting Real Estate is 3% of the exam (DBPR candidate booklet, January 2025). Expect a homestead or Save Our Homes item, a millage calculation, and a federal question on the home-sale exclusion.

Sources

North Carolina law as published by the General Assembly and the Office of Administrative Hearings, checked 2026-11-05:

• Art. VII, § 6, Fla. Const.
• § 193.011, Fla. Stat.
• § 193.155, Fla. Stat.
• § 193.1554, Fla. Stat.
• § 193.461, Fla. Stat.
• § 196.011, Fla. Stat.
• § 196.031, Fla. Stat.
• § 196.202, Fla. Stat.
• § 197.122, Fla. Stat.
• § 197.162, Fla. Stat.
• § 197.172, Fla. Stat.
• § 197.333, Fla. Stat.
• § 197.3635, Fla. Stat.
• § 197.502, Fla. Stat.
• IRS Publication 523 (2025)
• IRS Publication 530 (2025)
• DBPR, Florida Real Estate Sales Associate Candidate Information Booklet (Jan 2025), content areas