One of the biggest benefits of being a resident of Florida and owning homestead property is the Homestead tax exemption. Every county in Florida levies an ad valorem property tax on all real property in the county. This tax is calculated by multiplying the taxable value of the property (as determined by the county property appraiser) by the millage rate (as determined by the local taxing authorities such as the county commission, city council, school board and special taxing districts). The homestead exemption reduces the taxable value of your homestead property by $25,000, resulting in a reduction of ad valorem taxes on your home. In January, 2008, the citizens of Florida approved Amendment 1 to its state constitution and created an additional homestead exemption of $25,000 to lower the taxable value of homestead property for all taxes except those levied by school districts. The exemption applies on the assessed value of the homestead property that exceeds $50,000. This means that, if the just valuation of your homestead property is $100,000, the first $25,000 of value and the assessed value between $50,000 and $75,000 would be exempt from taxes. However, the value between $50,000 and $75,000 would still be used to determine the amount of school tax.

As an example, let’s look at the taxes on a hypothetical piece of property, first without the homestead exemption and then with the exemption.

Without Homestead Exemption:
Assessed Value.................... $100,000
No Homestead Exemption .......$ 0
Taxable Value...................... $100,000
Times Millage Rate (.008)*
Times School Millage (.010)*
Tax Due ..............................$ 1,800


With Homestead Exemption:
Assessed Value .....................$100,000
Less Homestead Exemption ......$ 50,000
Taxable Value (General Tax).... $ 50,000
Times Millage Rate (.010)*
Tax Due............................... $ 500
Taxable Value (School Tax) .....$ 75,000
Times School Millage (.008)**
Tax Due............................... $ 600
Total Tax Due........................$ 1,100

The millage rate of .018 (18 Mills) has been arbitrarily chosen to illustrate the effect of homestead exemption. The rate will vary from county to county and from year to year.

** Additional homestead exemption does not apply to taxes levied by school districts

As you can see, the homestead exemption gave you a savings of $700 in the above example. The savings may be more or less depending on the millage rate set for that year in the county.