Portability a new benefit of homestead provisions

Mar 25, 2016 3 min read

Dear Mr. Feichthaler,

We are a growing family so we are planning to “upsize” our house. We have lived in Cape Coral for 7 years and have been homesteaded the entire time, so we have a good Save Our Homes exemption on our current house. We have heard the SOH savings can be moved to the new house. We are actually going to live in an apartment for a year, then buy the new house. We plan to keep the proceeds from the sale of our house in our checking account. Do you see any issues?

– Dan K.

Dear Dan:

Portability is a relatively new benefit that allows a current homesteaded Florida homeowner to move to a new Florida property and take their “Save Our Homes” tax savings to the new property. This must occur within two years of selling or abandoning the original homestead. To be eligible for portability, you must complete a form DR-501T “Transfer of Homestead Assessment Difference” when you apply for the new homestead application. As with normal homestead tax applications, the deadline is March 1.

I caution you on placing your homestead funds in the same account you are using for other purposes. Although this will not jeopardize portability of tax savings, it could jeopardize the creditor protection that homestead property normally affords. If you co-mingle your homestead proceeds with other monies, a creditor could attempt to lien those funds. If you are selling a homestead and plan to buy another, it is strongly recommended you open a separate bank account that only holds homestead money. You can even name it “Homestead Account”. You will want to keep those funds separate until you spend them on the new house.

Eric P. Feichthaler has lived in Cape Coral for 28 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through his chairmanship of the Harney Point Kiwanis Club KidsFest, which provides a free day of fun and learning to thousands of Cape Coral families, and funds numerous scholarships. He has been married to his wife, Mary, for 14 years, and they have four children together. Recently, he earned his board certification in Real Estate Law from the Florida Bar. He is also a Supreme Court Certified Circuit Civil Mediator.

This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.