Florida Property Taxes Explained for New Residents

The Bill That Surprises Almost Everyone -- Usually in a Good Way

Your first November property tax bill as a Florida homeowner tends to go one of two ways. If you moved from New Jersey, New York, Connecticut, or Illinois -- where property tax rates are among the highest in the country -- you open the bill and feel something close to relief. Sometimes something close to disbelief. What your neighbors in those states are paying for a smaller home in a less desirable location, you are now paying for a coastal lifestyle in one of the fastest-growing and most sought-after regions in the country. If you have never owned in a high-tax state, you may not have that point of comparison -- but understanding what you are getting, and how Florida's system works, helps you plan accurately and make the most of the protections that are available to you.

The Homestead Exemption: Your Most Important First Step

The moment you close on a Florida home that will be your primary residence, your clock starts on one of the most valuable benefits in the state's tax code. The Florida Homestead Exemption reduces your home's assessed value by $50,000 for property tax purposes -- which translates to direct, real dollar savings on your annual tax bill.

Here is how it works mechanically. The first $25,000 of the exemption applies to all property taxes. The second $25,000 applies to non-school property taxes only. The combined effect varies based on your county's millage rates, but on a home assessed at $600,000, a $50,000 exemption is meaningful -- typically saving several hundred to over a thousand dollars per year depending on your specific location and the applicable millage rates.

The deadline matters. You must apply for the Homestead Exemption by March 1 of the year following your purchase. If you close in September 2026, you apply by March 1, 2027, and the exemption takes effect for the 2027 tax year. Miss that deadline and you wait until the following cycle. Your county property appraiser's website allows you to apply online -- it is not complicated, and it is absolutely worth doing.

The exemption is only available on your primary residence. You cannot homestead an investment property or a vacation home. And you can only have one homestead exemption in the state of Florida -- if you own multiple properties, you choose one.

Save Our Homes: The Cap That Keeps Giving

This is the benefit that most out-of-state buyers have never heard of -- and once they understand it, they often wonder why anyone would live anywhere else.

Under Florida's Save Our Homes provision, once your home is homesteaded, the annual increase in your assessed value for tax purposes is capped at 3 percent or the rate of change in the Consumer Price Index, whichever is lower. It does not matter how much your home's actual market value rises. Your tax bill can only grow by that capped amount each year.

In practical terms: if you bought your home in Northeast Florida in 2022 and it has appreciated significantly since then -- which many homes in St. Johns County and Ponte Vedra Beach have -- your taxable assessed value is not growing at the same rate as your market value. It is growing at a maximum of 3 percent per year, or less if inflation runs below that. The gap between your assessed value and your market value -- sometimes called the SOH benefit or SOH differential -- grows over time, and so does the protection it provides.

For long-term homeowners in an appreciating market, Save Our Homes is one of the most financially significant benefits of Florida ownership. It rewards staying. The longer you own and the more the market appreciates, the more valuable the cap becomes in dollar terms.

Assessed Value vs. Market Value: Understanding the Difference

These two numbers are not the same in Florida, and understanding the difference is important for budgeting accurately -- especially in the years after you purchase.

Market value is what your home would sell for in the current market. The county property appraiser estimates this annually based on sales activity in your area. In a rising market, market value can increase significantly year over year.

Assessed value is what the county uses to calculate your property taxes. In your first year of ownership, the assessed value is typically close to your purchase price -- or whatever the property appraiser determines as market value for that year. Once you are homesteaded, the Save Our Homes cap takes effect, and your assessed value is allowed to grow only within that limit.

The result: over time, your assessed value can diverge significantly from your market value. A homeowner who paid $500,000 in 2020 and whose home is now worth $750,000 may be paying taxes on an assessed value of $550,000 or $560,000 -- not $750,000. That differential represents real, annual tax savings that compound every year you own the home.

CDD Fees: The Line Item Nobody Warns You About

In many newer master-planned communities throughout Northeast Florida -- Nocatee, RiverTown, Tributary, Silverleaf, and others -- you will encounter something called a CDD fee on your property tax bill. CDD stands for Community Development District, and it is one of the most important things to understand before you close on a home in one of these communities.

Here is what a CDD is: a special taxing district created by the developer to finance the infrastructure of the community -- roads, utilities, drainage systems, recreational amenities, and common area improvements. Instead of charging buyers for all of this upfront in the purchase price, the developer issues bonds and the cost is repaid over time through annual assessments on homeowners within the district.

The CDD assessment appears on your property tax bill as a separate line item. It is not part of your HOA fee, though the two often exist simultaneously. Annual CDD fees in Northeast Florida communities vary -- some run in the hundreds of dollars per year, others can be over a thousand annually, depending on the community, the original bond amount, and the amortization schedule.

The CDD debt does eventually retire. As the bonds are paid off, the debt component of the assessment drops or disappears. The maintenance component -- covering ongoing upkeep of community infrastructure -- typically remains, but is generally modest.

Before buying in any community with a CDD, ask for the full disclosure. Your agent can obtain this information, and it should be disclosed in the seller's property disclosure and potentially in the HOA documents. Know the current annual amount, when the debt is scheduled to retire, and what the maintenance component is expected to be going forward.

How to Estimate Your Tax Bill Before You Buy

You do not have to wait until closing to understand what your property taxes will likely be. Here is a practical approach for estimating your bill on any property you are considering in Northeast Florida.

Start with the county property appraiser's website. Both St. Johns County and Duval County have publicly accessible property appraiser portals where you can look up any address and see the current assessed value, the current owner's tax bill, any exemptions in place, and the millage rates by district. This is public information and takes minutes to find.

The important caveat: if the current owner has a Homestead Exemption and a long-standing Save Our Homes benefit, their assessed value may be significantly lower than what yours will be in your first year of ownership. When you purchase, the property is re-assessed close to the purchase price. You will then start building your own SOH protection from that new baseline -- but the first year or two of ownership typically carry a higher effective tax rate than the current owner is experiencing.

Factor in any CDD fees, your expected HOA dues, and your property tax estimate together to understand your true monthly carrying cost. Your lender will also build property taxes into your escrow calculation -- make sure you and your lender are using a realistic number for your first year of ownership, not the seller's current tax bill.

Portability: Taking Your Savings With You When You Move Within Florida

One of the most underappreciated features of Florida's property tax system is something called Portability -- the ability to transfer your accumulated Save Our Homes benefit when you sell one Florida homestead and purchase another.

Here is how it works. If you have owned a homesteaded Florida property for several years and built up a significant SOH differential -- the gap between your assessed value and your market value -- you do not lose all of that when you sell and buy again within the state. Florida allows you to transfer up to $500,000 of that accumulated benefit to your new homestead, reducing the assessed value on your new home from the point of purchase.

This is enormously valuable for long-term Florida homeowners who are moving up, downsizing, or relocating within the state. It means you do not start completely from scratch on your tax protection when you move. The portability benefit must be claimed -- you apply for it with your new county property appraiser, and there are timing requirements to be aware of. Your agent and a tax professional can walk you through the specifics when the time comes.

Frequently Asked Questions

When should I apply for the Florida Homestead Exemption?

Apply by March 1 of the year following your purchase. If you close in any month of 2026, your application deadline is March 1, 2027. The exemption takes effect for the 2027 tax year. Applications can be submitted online through your county property appraiser's website.

Does Florida have a senior exemption in addition to the Homestead Exemption?

Yes. Florida offers an additional Homestead Exemption for certain low-income seniors -- the income threshold varies, and some counties offer additional local exemptions as well. If you are 65 or older, it is worth checking with the county property appraiser in the county where you purchase to see what additional exemptions may apply to your situation.

Are CDD fees tax-deductible?

The portion of CDD fees that goes toward debt service (repaying the infrastructure bonds) is generally considered a special assessment rather than a property tax and is not deductible as property tax for federal income tax purposes. The portion covering ongoing maintenance may or may not be deductible. Tax treatment can vary based on individual circumstances -- consult a tax professional for guidance on your specific situation.

What happens to my property taxes when I move from a high-tax state to Florida?

For most buyers coming from states like New Jersey, New York, Illinois, or California, property taxes in Northeast Florida are noticeably lower -- even before accounting for the Homestead Exemption and Save Our Homes benefit. The effective property tax rate in St. Johns County is significantly below what owners in high-property-tax states typically pay. The complete financial picture improves further when you add Florida's zero state income tax to the calculation.

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What To Do Right Now

Understanding your property tax picture before you buy -- not after -- is the kind of preparation that experienced buyers and relocation specialists always emphasize. It affects your budget, your offer strategy, and your long-term financial planning in ways that go beyond the purchase price on any listing sheet.

Call or text Joey Larsen at 904-863-6679, or visit RetireMeToFlorida.com. Whether you have specific questions about a property you are considering or want to understand the full cost picture of owning in Northeast Florida, the conversation is worth having early.