Florida Caps Property Tax Hikes at 3% a Year for Longtime Homeowners. Buyers Moving In From New Jersey Get Reassessed at Full Market Value the Next January 1
That Florida ranch house looks like a steal until the first tax bill arrives and the number bears no resemblance to what the seller ever paid. Here is what the state's property tax rules actually do to buyers relocating from…
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A retired couple sells the split-level in Bergen County, pockets the equity, and closes on a $650,000 ranch in Sarasota. The seller’s last property-tax bill was $3,200. Their first bill lands at roughly $9,800.
Florida’s Save Our Homes cap did exactly what it was written to do in 1995: protect the person who already lived there. The buyer inherits the house, the pool, and the orange tree. The tax deal stays behind.
Save Our Homes, in Plain English
Save Our Homes is a Florida constitutional amendment that limits how fast the assessed value of a homesteaded primary residence can rise. The cap is the lesser of 3% a year or the change in inflation. Combined with the standard homestead exemption, which knocks up to $50,000 off taxable value for a primary residence, the two rules let longtime owners watch their neighborhood double in price while their tax bill barely moves.
Over 20 years, the gap between what a house is worth and what it’s taxed on can become enormous. That gap has a name on the property record: the Save Our Homes differential. It belongs to the owner, not the address.
Market Value, Assessed Value, Taxable Value: Three Different Numbers
- Market value (also called “just value”) is what the county appraiser thinks the home would sell for on January 1. It resets every year based on comparable sales.
- Assessed value is market value with the Save Our Homes cap applied. For a longtime owner, it can be a small fraction of market value. For a brand-new owner, it equals market value on the first January 1 after purchase.
- Taxable value is assessed value minus exemptions (homestead, senior, veteran, widow/widower). This is the number the millage rate multiplies against to produce the bill.
A house with a $650,000 market value, a $180,000 assessed value under the prior owner, and a $130,000 taxable value after exemptions might generate a $2,400 bill in the seller’s final year. On January 1 following the sale, the new owner’s assessed value snaps to $650,000. Even after the buyer files for their own homestead, the bill can more than triple.
Portability Rescues Floridians. It Does Nothing for a Buyer From New Jersey
Florida lets homesteaded owners carry up to $500,000 of their Save Our Homes differential to a new Florida home within three tax years. That’s portability, and it is the reason a Floridian can trade up without a tax shock.
An out-of-state buyer has no differential to port. There is no reciprocity with New Jersey, New York, or anywhere else. The clock starts at zero on the full market value on January 1 after closing.
Retiree Relocation Math in Plain Numbers
Florida’s headline tax pitch is real. There is no state income tax, no tax on Social Security, no tax on IRA or pension withdrawals. For a couple pulling New Jersey’s per-capita personal income of $84,844 out of retirement accounts, that alone can save five figures a year versus staying put.
Two line items decide whether the move pencils out: the reassessment and homeowners insurance, which in coastal Florida routinely runs multiples of a New Jersey premium after years of hurricane losses and carrier exits. Both lines inside the mortgage escrow work against the newcomer.
The cost-of-living gap also narrows once you’re there. Florida’s cost-of-living index sits at 103.414, above the 100 national benchmark, versus New Jersey’s 108.805. Real, but smaller than the brochure suggests.
Do This Before You Sign the Contract
National home prices keep climbing. The Case-Shiller National Home Price Index hit 336.7 in June 2026, its highest reading on record, which means the gap between a longtime Floridian’s assessed value and today’s market price is wider than ever.
Three moves before you budget the monthly nut:
- Pull the property record on the county appraiser’s website. Compare the current owner’s assessed value to the asking price. The difference is roughly what your bill is about to grow into.
- Ask the appraiser’s office for an estimated tax bill at full market value with your homestead exemption applied. Most Florida counties offer this tool by parcel ID.
- Get a bindable insurance quote in writing before the inspection period ends.
Portability, homestead, and the 3% cap are generous rules. They just aren’t yours yet. A fiduciary advisor or CPA who works with relocating retirees can run the full picture before the moving truck is booked.
This article is for informational purposes only and is not tax, legal, or investment advice. Consult a qualified tax professional about your specific situation.
Contact [email protected] for any questions or corrections.
Jake has been been working in financial media for almost 15 years. He focuses on all things personal finance for 24/7 Wall St. with high hopes to educate and entertain. Most recently, Jake spent 12 years working various roles at The Motley Fool. He started copy editing fool.com content, worked on premium and marketing campaigns, and helped launch The Ascent, a personal finance brand.
His work has been featured on platforms like MSN, Yahoo Finance, USA Today, and more. He's written about credit cards, social security, ETFs, savings accounts, and just about anything else you can imagine when thinking about money. Jake love to cook, play golf, and tell people he's never had a cavity. (It's true!)
