beachmouse said:
The assessed value adjusts upon the sale of property, whether it's homesteaded or not.
Quick FAQ on the Save Our Homes Act from Hillsborough County tax office:
http://www.hcpafl.org/www/downloads/save_our_homes.shtml
"Property granted Homestead shall be assessed at full market value (just value) as of January 1 of the year in which the property receives the exemption. In subsequent years, the assessed value of homestead exempt property will not increase more than 3% or the percentage change in the Consumer Price Index, whichever is less. There are exceptions to that limitation, including new construction or additions which are found to have escaped taxation in the past. Also, the limitation does not apply the year following a change of ownership."
As Joe said, it doesn't necessarily adjust to 100% of the sales price, but the increase in year 1 can be pretty substantial.
You also need to check with your county tax office to see if there are are specific times of the year when they accept homestead exemption filings. When we bought our house, it had previously been a rental (ie. not homesteaded) and the deadline for filing in the county that year was like March 1. We closed on the house May 2, so we had to pay the unhomesteaded taxes the first year (about a $200 cost because you are also not taxed on the first $25K of assessed value) and then got covered under Save Our Homes the following January.
I believe the date by which to file homestead in WalCo is also around Mar 1.
Here is info from
Waltonpa.com
Save Our Homes Amendment
10 Questions & Answers
Q. What is the new law?
A. Section 193.155(1), Florida Statutes, was enacted to implement an amendment to the state constitution to limit annual increases in property value assessments on real property qualifying for and receiving the homestead exemption.
Q. Which property is affected?
A. Only homestead property that remains under the same ownership during the calendar year qualifies for the limitation.
Q. What types of property are not subject to the cap?
A. Non-homestead property (such as residences without homestead, vacant land, nonresidential 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.
Q. What about improvements or additions to the property?
A. The full market 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.
Q. How is property with a partial homestead exemption affected?
A. Only that portion of the property receiving homestead exemption is subject to the assessment limitation. The remainder of the property is assessed at full market value under the law.
Q. How does the limit (cap) apply?
A. Property receiving the homestead exemption is to be assessed at full market 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 market value.
Q. What is the so-called ''recapture" rule?
A. In September 1995, the Governor and Cabinet approved a rule directing property appraisers to raise the assessed value of a qualifying homestead property by the maximum of 3% or the annual inflation rate, whichever is less, on all properties assessed at less than full market value whether or not that property's value increased during that calendar year.
For example, Property A's market value increases by 10% this year. As a homestead property, the property appraiser can only increase its value by 3% under the limitation.
In the next year, Property A's market value did not change. Since its assessed value under the limitation remains under market value, the property appraiser must increase the assessed value by 3% to bring its value closer to market value.
Q. What happens when a property is sold or otherwise conveyed to a new owner?
A. The assessment on any property which is sold or otherwise conveyed to new owner during a calendar year is raised to full market 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.
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 must apply for and receive a homestead exemption.