Imagine this: You’re looking to simplify your life by moving from a property valued at $1,000,000 to a more manageable $500,000 dwelling. The prospect of significant taxes on your new home looms large, right? Enter the transformative power of Homestead Tax Portability.
What Is Homestead Tax Portability?
It’s the process of transferring the difference (up to $500,000) between your current home’s assessed value and its market value when selling, applying this benefit to reduce the assessed value of your new home is key. This strategic move can dramatically decrease your property taxes.
Downsizing? Keep Your Tax Benefits
Transitioning to a smaller residence doesn’t mean losing all your hard-earned tax advantages. You can transfer a portion—specifically 37.5%—of your accumulated Save Our Homes (SOH) benefit to your new home. This reduction can significantly lower the assessed value of your new property, thereby reducing your taxes.
Real-Life Example:
- Your current home was purchased for $400k a decade ago; its assessed value has modestly grown to $500k, though its real market value has soared beyond $1,000,000.
- The difference between the assessed value and real market value (up to $500k) is your portable tax benefit. In the case of downsizing, you’re eligible to transfer 37.5% of this benefit, plus the $50,000 standard homestead exemption, totaling $237,500 in total deductions.
- So after selling your million-dollar property you buy a new $500k home, if it’s assessed at $450k, apply your $237k portability, makes the new taxable value lower $213k. Taxed at a 2% rate, gives an estimated tax of $4,260 per year.
Online Broward County Homestead Portability Calculator:
https://bcpa.net/PortabilityCalc.asp
Take Action:
Don’t let the prospect of property taxes deter your next move. Whether you’re upsizing or downsizing, discover how Homestead Tax Portability can offer significant financial benefits. Embrace this opportunity to reduce your taxes and make your ideal move a reality with confidence.
Looking to Sell?
If you’re contemplating selling your South Florida home and want to make the most of Homestead Tax Portability, reach out to me. Let’s ensure your move not only meets your lifestyle needs but also maximizes your financial benefits. Contact me today to start the conversation and plan your strategic move.
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