A Tampa Real Estate Agent’s Guide
Over the years, I’ve helped countless families find their dream homes, downsize, or relocate to sunny Florida. One of the most common questions I get from my senior clients is about property taxes—specifically, how to save money on them. If you’re 65 or older and own property in Florida, you might be leaving money on the table!
Florida is already one of the most tax-friendly states in the country, with no state income tax and a homestead exemption that helps homeowners save on property taxes. But did you know that if you’re a senior, you may qualify for additional savings? That’s right—the Additional $50,000 Homestead Exemption for Persons 65 and Older (Florida Statute 196.075) is designed to put more money back in your pocket. Staying updated on current tax laws is crucial to maximize these benefits.
Let’s break it down so you can take full advantage of these property tax benefits!
Why Tax Benefits Matter For Seniors
I work with many retirees and seniors looking to downsize, relocate to Tampa, or simply make the most of their golden years. One of the biggest concerns I hear is about the cost of living, and property taxes can be a major expense. By taking advantage of these various tax exemptions now, you can free up money for the things that matter—whether that’s traveling, spending time with family, or upgrading to a home that better suits your lifestyle.
No Florida State Taxes!
Florida is renowned for its tax-friendly environment, making it a haven for seniors and retirees. One of the most significant advantages is the absence of personal income tax, meaning you won’t have to pay state taxes on your income. This includes Social Security benefits, pensions, IRAs, 401(k)s, and other forms of retirement income, which are all exempt from state taxation.
Additionally, Florida boasts a relatively low property tax rate, with an average effective rate of 0.83%. Residents are taxed on a county level rather than a state level, so the rate is much lower than that of other states.
However, it’s important to note that property taxes can vary from year to year and between different counties within the state. This variability makes it crucial to stay informed about your specific county’s property tax rates and any potential changes.
In general, the standard federal tax deduction can also decrease taxable income for seniors, depending on factors like filing status and age.
What is the Additional $50,000 Homestead Exemption?
If you’re a homeowner in Florida, you’re probably familiar with the standard Homestead Exemption, which can reduce your property’s taxable value by up to $50,000. The Florida homestead exemption is particularly impactful for seniors, significantly enhancing their financial stability by reducing the taxable value of their primary residence. But what many people don’t realize is that Florida offers an additional exemption of up to $50,000 for senior citizens who meet certain criteria.
This exemption applies to the assessed value of your primary residence, meaning it can significantly lower your property tax bill.
Who Qualifies for the Senior Homestead Exemption?
Not everyone over 65 years of age automatically qualifies for this extra exemption, so let’s go over the requirements:
- You must be at least 65 years old as of January 1 of the tax year you’re applying for to qualify for the senior citizen exemption.
- You must own and live in the home as your permanent residence. This exemption only applies to homesteaded properties—no second homes or rental properties.
- Your household income must meet eligibility limits. Florida adjusts this limit annually based on inflation. The total household income limitation is subject to change each year. The adjusted income limitation for the 2025 exemptions is $37,694.
- Your county must approve the exemption. Not all Florida counties participate, but if you’re in Hillsborough County (where Tampa is located), you’re in luck—this exemption is available!
How Much Can You Save?
The savings depend on your home’s assessed value and your local millage rate (the tax rate applied to your property). Let’s say your home has an assessed value of $250,000. With the standard $50,000 Homestead Exemption and the additional $50,000 Senior Exemption, your property’s assessed taxable value could be reduced to $150,000. That means you’re only paying property taxes on $150,000 instead of $250,000—a substantial savings!
While the exact amount you’ll save varies, it could add up to hundreds, even thousands, of dollars each year. That’s money that could go toward home improvements, travel, or just enjoying your golden years stress-free.
Other Property Tax Benefits for Seniors in Florida
The Senior Homestead Exemption isn’t the only full property tax exemption or break available to older homeowners in Florida. Here are a few more you should know about.
The Save Our Homes Cap
If you’ve lived in your home for a while, you’ve probably benefited from this already. It limits the annual increase in your home’s assessed value to 3% or the rate of inflation, whichever is lower. This prevents your property taxes from skyrocketing, even if your home’s market value shoots up, which is apt to happen in a hot real estate market like Tampa.
Portability of Homestead Exemption
If you’re downsizing or moving to another home in Florida, you can transfer up to $500,000 of your tax savings to your new property.
Exemptions for Disabled Seniors and Veterans
If you have a disability or are a veteran, you may qualify for additional exemptions that can lower your tax bill even more.
Adjusted Gross Income (AGI) Limitations
When it comes to qualifying for various property tax benefits in Florida, your Adjusted Gross Income (AGI) plays a crucial role. For instance, to be eligible for the Low-Income Senior Exemption, your combined household AGI for 2024 must not exceed $37,694. This threshold is adjusted annually in January to reflect changes in the average cost of living index.
Understanding these AGI limitations is essential because they directly impact your eligibility for property tax benefits. By keeping track of your AGI and staying informed about the annual adjustments, you can ensure that you meet the requirements and take full advantage of the available tax benefits.
Estate Planning and Tax Savings on an Inheritance
Estate planning is a vital aspect of financial management for seniors in Florida, as it helps minimize tax implications and ensures that your assets are distributed according to your wishes. One of the significant advantages of living in Florida is that the state does not impose an estate or inheritance tax. This means that your heirs won’t have to pay state taxes on the assets they inherit from you.
However, it’s important to consider federal tax implications and other factors when creating an estate plan. I advise consulting with an experienced estate planning attorney who can help you navigate the complexities of estate planning, protect your assets, and ensure that your estate is managed according to your wishes.
Thinking About Moving? Let’s Talk!
Living in Florida comes with a lot of perks, and the tax benefits for senior citizens are just one of them. It’s your money—keep more of it where it belongs!
If you’re considering a move to Tampa, or are looking for a local option to downsize with another property in the area, I’d love to help! As a local real estate expert who has lived here my whole life, I know the ins and outs of the market, the best neighborhoods for seniors, and all the tax benefits that can help make homeownership more affordable.
Not sure where to start? I’m here for you every step of the way to navigate the hot Tampa real estate market. Let’s chat today to make your homeownership journey as smooth as possible!