How Florida homestead exemption: Tax Relief in 2025
Property taxes are a big worry for many in Florida. The newly approved Florida homestead exemption aims to bring changes starting in 2025. But what do these changes mean, and how will they affect homeowners? Let’s break down Florida’s new property tax rules starting with how real estate tax in Florida works and see how they could shake up your finances.
What is Florida Amendment 5?
Florida amendment 5, approved by voters in 2022 with strong support, adjusts the second $25,000 of the homestead exemption to match changes in the Consumer Price Index (CPI). This annual adjustment helps the exemption keep up with inflation, providing homeowners with increasing tax relief as living costs go up.
How the Florida Homestead Exemption Works
Throughout Florida, homeowners who use their property as their primary residence may qualify for homestead tax exemptions.
Currently, the homestead exemption structure is:
- The first $25,000 of a home’s value is tax-free.
- The second $25,000 is taxed.
- The third $25,000 is tax-free, except for school taxes.
Starting in 2025, the second $25,000 exemption will grow with inflation, helping homeowners save more over time. As living costs increase, the exemption amount will also rise, reducing the taxable value of a homeowner’s property.
How much Homeowners will save?
Homeowners, especially in expensive areas like Broward County, will benefit most from Amendment 5. Initial savings may be modest around $10 to $15 annually but these could grow as inflation skyrockets, especially as inflation and interest rates continue shifting.
For properties valued between $50,000 and $75,000, the amendment’s inflation exemption could provide substantial relief, saving homeowners hundreds of dollars annually.
Impact on Local Governments
Florida is getting ready to put Amendment 5 into action. This move could affect how much money local governments make, which ties back to how journal entry accounting tracks revenue adjustments across fiscal years. It’s estimated that in the 2025-26 fiscal year, there will be about $22.8 million less in revenue. This will affect most taxing authorities in the state, except for school districts.
This amount might seem big, but it’s actually a small part of the total property tax income. (Broward County witnessed a huge increase in property tax revenue last year). This shows that Amendment 5’s impact on local budgets is quite small under the Florida amendment.
What’s Next for Florida’s Tax System?
Florida’s Save Our Homes (SOH) amendment has been a huge win for homeowners. It limits how much property taxes can go up each year. For homes where people live, the increase is capped at 3% or CPI change, whichever is less. For other properties, the cap is 10%.
How Can we Help?
We’re here to help you figure out just how much you can save, with the new inflation-adjusted homestead exemption, and make sure you’re getting every dollar by getting the right professional tax preparation strategies for your situation.
For those in areas like Broward County, we’ll check out your property assessments, spot any exemptions you might be missing, and file an amended return if mistakes are unfairly increasing your tax bill. that could be unfairly hiking up your tax bill. Because why pay more than you have to?
Contact JC Castle Accounting today to schedule a free consultation and let us help you keep more of your hard-earned money where it belongs in your pocket.
FAQ: Florida Homestead Exemption (2025 Update)
1. What is the homestead exemption in Florida?
The homestead exemption Florida offers is a property tax benefit for homeowners who live in their home as their primary residence. It reduces the taxable value of your property, which lowers your annual tax bill. If you’re wondering what is homestead exemption Florida, it simply means tax savings for eligible homeowners.
2. How does the Florida homestead exemption work?
The Florida homestead exemption gives homeowners up to $50,000 in property tax relief. The first $25,000 applies to all taxes, and the second $25,000 applies to non-school taxes. Starting in 2025, this second portion will adjust with inflation under the new amendment.
3. What are the Florida homestead exemption rules?
To qualify under Florida homestead exemption rules, you must:
- Own the property
- Use it as your permanent residence
- Be a Florida resident as of January 1
- Apply by the deadline (usually March 1)
4. How to file for homestead exemption in Florida?
If you’re wondering how to file for homestead exemption in Florida, the process is simple:
You apply through your county property appraiser’s office—either online or in person. You submit basic documents, verify residency, and complete the application before the deadline.
5. How to apply for Florida homestead exemption?
The steps for how to apply for Florida homestead exemption include:
- Confirm the home is your primary residence.
- Gather your supporting documents.
- Submit your application online or at the property appraiser’s office.
- Wait for approval from the county.
6. What documents do I need for homestead exemption in Florida?
The most common documents for what documents do I need for homestead exemption in Florida include:
- Florida driver’s license or state ID
- Florida vehicle registration
- Voter registration card (if applicable)
- Proof of residency (utility bill or bank statement)
- Property deed or tax bill
Your county may ask for additional supporting paperwork.
7. When should I apply for the homestead exemption?
Applications are typically due by March 1 of the tax year. If you just moved into your home, apply as soon as possible so you don’t miss out on savings.
8. Does the new Amendment 5 change anything for homeowners?
Yes. Starting in 2025, the second $25,000 portion of the exemption will increase each year based on inflation. This gives homeowners more financial relief over time.
9. Who benefits the most from the Florida homestead exemption?
Homeowners in counties with high property values like Broward County usually benefit the most because the exemption directly lowers the taxable value of expensive properties.
10. Can JC Castle Accounting help me with my exemption?
Absolutely. We can help you understand your savings, review your property assessment, and ensure you’re taking full advantage of the Florida homestead exemption. If there’s an error raising your tax bill, we can help fix it.
