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How Does Amendment 10 Affect My Property's Assessment?

An Explanation of the "Save Our Homes" Amendment and Its Effects

Dear Homeowner:

The Office of the Orange County Property Appraiser is responsible for assessing all property within Orange County fairly and equitably according to Florida law.

This office does not set tax rates or determine the amount of taxes you pay. That is the responsibility of the various taxing authorities – – such as city and county commissions, the local school board and others.

Since 1995, the annual increase in value for residential property with a Homestead exemption has been limited by constitutional amendment. State laws and regulations have been put into force to implement this limit. These frequently asked questions detail this amendment and its impact on you.

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What is Save Our Homes

In 1992 voters approved an amendment to the Florida Constitution known as Amendment 10, or Save Our Homes (SOH). SOH is an assessment limitation, or “cap”, on increases in the assessed value of a homestead residence. Those increases are limited to 3% or the percent change in the CPI (Consumer Price Index), whichever is less. The “cap” goes into effect beginning the year after a homestead exemption is granted.

Prior to SOH, taxable value, upon which taxes were calculated, was equal to market value less Homestead exemption. When the market value increased, so would taxable value and therefore, taxes. The SOH law prohibits this from happening – allowing for the maximum 3% “cap” to protect assessed value, regardless of how high market values may increase. This prevents owners from being taxed out of their homes when the market is escalating.

A SOH benefit stays on a Homestead property, providing there are no ownership changes or property improvements. This can provide significant tax savings over time, especially when the market is increasing, as was seen during the real estate boom of 2004 – 2007. The table below illustrates how significant the tax savings can be with SOH. Let’s assume a home was purchased for $125,000, it qualified for Homestead exemption and the Property Appraiser valued the property at $110,000 for the first year.

If property sales in the neighborhood indicate an increase of 15% per year in the market value, the tax benefits due directly to SOH can be seen in the last column. Assuming a tax rate of $20/$1000 of taxable value, the tax savings over 5 years would be $3,153.12. That is a significant savings!

Which property is affected?

Only Homestead property that remains under the same ownership during the calendar year qualifies for the limitation.

What types of property are not subject to the cap?

Non-Homestead property (such as residences without Homestead, vacant land, non-residential property), agricultural property, tangible personal property as well as Homestead property that has been sold or otherwise conveyed to a new owner during the calendar year are not subject to the limitation on assessment.

What about any improvements or additions to the property?

The full just value of physical alterations to the property such as additions or improvements (not including normal maintenance) will be added to the property's assessment after the cap has been applied to the qualifying Homestead property.

How does the limit (cap) apply?

Property receiving the Homestead exemption is to be assessed at full just value the year in which the property receives the exemption.

In the following year, the property is reassessed and any change from the prior year's value is not to exceed the lower of 3% of the assessed value for the prior year or the percentage change in the Consumer Price Index. In no instance may any assessment exceed full just value.

Can the taxable value percentage of Homestead property ever exceed the limitation (cap) from one year to the next?

Even though the assessed value increase percentage of homestead property cannot exceed the limitation, it is possible that the taxable value percentage increase of a property may exceed the limited percentage after allowable exemptions are deducted. The increase limit applies to assessed value, not to taxable value.

What happens when a property is sold or otherwise conveyed to a new owner?

The assessment on any property which is sold or otherwise conveyed to a new owner during a calendar year is raised to full just value according to law. The limitation will be applied to the assessed value in the first year following the year in which the new owner qualifies the property for Homestead exemption.

Important Reminders

Even if the property received a Homestead exemption under the previous owner, the limitation -- just like the exemption -- expires with a change in ownership. The new owner(s) must apply for and receive a Homestead exemption.

Property taxes for new owners will be calculated on the basis of full just value of the property less any exemption(s) in that first year.