Florida Real Estate Blog

Understanding the Three Percent Cap Law

The three percent cap is known as "Save Our Homes" (SOH) and was a constitutional revision that took effect January 1, 1995 which annually limits the increase in the assessment of homesteaded properties at 3% or the Consumer Price Index (CPI) which ever is less.

The three percent cap is not a limitation on taxes, but it is a cap on the assessement of the parcel, not the taxes paid. In other words, the assessment could stay the same or go down and yet the taxes through a millage increase could go up.

To qualify, you must have a property with a homestead exemption. All other properties are not subject to the cap. Approximately 1/2 of all residential properties do not have homestead and are not subject to the cap.

The difference between Market Value and Assessed Value is that Assessed Value is the capped value as limited by the Three Percent Cap. The base year is the first year that you file and receive a homestead exemption. For example: You buy a home in July, 2003 and file for homestead exemption in January or February 2004. The base year is 2004, the year your received the homestead exemption. The base value is the property assessment as determined by the property appraiser for the 2004 Tax Roll.

posted by Vincent Napoleon at Permanent Link