Florida Real Estate Taxes: Millage, Homestead, and Closing Taxes

Three values, three officials, and millage

Just value is the property's fair market value for assessment purposes. Assessed value is the value after any assessment limitation, and taxable value is assessed value minus applicable exemptions. The formula is Tax = Taxable Value × Millage Rate.

The county property appraiser determines value and exemptions, taxing authorities set millage rates, and the county tax collector bills and collects. A non-ad valorem assessment is based on a unit or service, such as drainage or paving, and does not use taxable value times millage.

A mill is one one-thousandth of a dollar, so 15 mills is 0.015, or $15 per $1,000 of taxable value. If several millage rates apply with different exemptions, such as school and non-school levies, calculate each tax separately and add the results.

• Property appraiser: values property and administers exemptions
• Taxing authority: levies the rate
• Tax collector: bills and collects
• 1 mill = 0.001; 18.5 mills = 0.0185
• Tax = taxable value × decimal millage

Worked property-tax example

A homestead has a just value of $340,000 and $30,000 of accumulated Save Our Homes protection. The owner receives a $25,000 exemption for school taxes and a total $50,000 exemption for non-school taxes. School millage is 7 mills and non-school millage is 11 mills.

First find assessed value: $340,000 - $30,000 = $310,000. School taxable value is $310,000 - $25,000 = $285,000. School tax is $285,000 x 0.007 = $1,995.

Non-school taxable value is $310,000 - $50,000 = $260,000. Non-school tax is $260,000 x 0.011 = $2,860. Total ad valorem tax is $1,995 + $2,860 = $4,855.

• Assessed value: $310,000
• School tax: $1,995
• Non-school tax: $2,860
• Total: $4,855

Homestead, Save Our Homes, and portability

A qualifying Florida permanent residence may receive a homestead exemption that can reduce taxable value by as much as $50,000, subject to how the exemption applies to school and non-school levies. The owner applies through the county property appraiser, generally by March 1.

Save Our Homes limits the annual increase in the assessed value of an established homestead to 3% or the percentage change in the Consumer Price Index, whichever is lower. The cap limits assessed-value growth; it does not freeze market value or the tax bill.

Portability may allow an eligible owner to transfer the Save Our Homes assessment difference to a new Florida homestead; the exemption itself is not transferred, so the owner applies again. After a qualifying ownership change, property is generally reassessed at just value, so a buyer should not assume the seller's current tax bill will continue.

• Homestead application: generally due March 1
• SOH cap: lower of 3% or CPI change
• Portability: transfer of eligible assessment difference
• New owner: do not rely on the seller's capped assessment

Florida taxes at closing, with a worked example

Documentary stamp tax applies to deeds transferring Florida real property. Outside Miami-Dade the rate is $0.70 per $100 or fraction of consideration. Miami-Dade generally uses $0.60 and may add a $0.45 surtax that does not apply to a transfer of only a single-family dwelling.

Promissory notes and other written obligations are generally taxed at $0.35 per $100 or fraction, capped at $2,450 for a note, with no comparable cap on a recorded mortgage. The nonrecurring intangible tax is 2 mills, or 0.002, on an obligation secured by Florida real property; the lender is liable but may pass the cost to the borrower.

Outside Miami-Dade, a $325,050 sale is 3,250.5 units of $100, which rounds up to 3,251 units × $0.70 = $2,275.70. A $260,000 secured note has documentary stamps of 2,600 × $0.35 = $910 and intangible tax of $260,000 × 0.002 = $520. Keep the bases separate: the deed rate applies to the sale price, and mortgage taxes apply to the loan.

• Deed tax outside Miami-Dade: $0.70 per $100 or fraction
• Note and mortgage documentary stamps: $0.35 per $100 or fraction
• Nonrecurring intangible tax: 2 mills, or 0.002
• Deed tax on $325,050: $2,275.70
• Documentary stamps on a $260,000 note: $910
• Nonrecurring intangible tax on $260,000: $520

Federal income-tax ideas

For income-tax purposes, adjusted basis generally begins with acquisition cost, then increases for qualifying capital improvements and certain acquisition costs, and decreases for items such as depreciation. A simplified gain formula is Amount Realized - Adjusted Basis = Realized Gain.

Do not confuse capital improvements with repairs. A capital improvement generally adds value, prolongs useful life, or adapts property to a new use and may increase basis. An ordinary repair generally maintains the property and does not automatically increase basis.

Depreciation for federal income-tax purposes is not the same as appraisal depreciation. Tax depreciation is a cost-recovery deduction for qualifying income-producing or business property; land is not depreciated. Specific federal exclusions, deductions, and filing treatment can change and depend on taxpayer facts, so license candidates should learn the tested concepts without giving clients tax advice.

• Adjusted basis = original basis + qualifying additions - qualifying reductions
• Realized gain = amount realized - adjusted basis
• Land is not depreciated for federal income-tax purposes
• Refer client-specific tax questions to a qualified tax professional

Fast exam traps

Use taxable value, not automatically the sale price. Convert mills to a decimal. Separate school from non-school levies when exemptions differ. Save Our Homes limits assessed-value growth rather than just value. Round up documentary-stamp units only when the rate says per $100 or fraction. Finally, keep deed consideration separate from the amount of the mortgage obligation.

Always use the numbers supplied in an exam question if they differ from a memorized example.

• Just value is not always taxable value
• 18 mills means 0.018
• SOH is an assessment limitation, not a tax freeze
• Per $100 or fraction means round taxable units up