Save Our Homes only protects a primary residence. Every other property in Florida runs under a separate, less generous cap that most investors have never read.
- Non-homestead property assessments may rise no more than 10% per year for county, city and special-district levies.
- School district taxes are exempt from the cap and are levied on full market value every year.
- The cap resets on a sale or a change of ownership or control, including certain LLC membership transfers.
- There is no exemption and no portability for non-homestead property.
Two caps, one state
Florida has run two assessment limitations side by side since 2008. Homestead property gets Save Our Homes at 3%. Everything else, meaning rental houses, condos held as investments, vacation homes, vacant land and commercial buildings, gets the 10% non-homestead assessment limitation under sections 193.1554 and 193.1555 of the Florida Statutes. Voters made it permanent in 2018.
The mechanics mirror the homestead cap. The property appraiser estimates market value every January 1. The assessed value for capped levies may rise no more than 10% over the prior year's assessed value. In a market that rose 25%, an investor's assessment rises 10%. In a flat market it rises to meet market value and stops there.
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The school tax exception
The exception is the one that matters. The 10% cap does not apply to school district levies. School taxes, typically five to seven mills and often the largest single line on the bill, are levied on full market value every year regardless of the cap. On a $500,000 rental in a fast-rising market, the county and city lines are protected while the school line tracks the market in full. Your TRIM notice shows this as two different taxable values, one for school and one for non-school, which confuses first-time investors.
What resets it
A change of ownership resets the assessment to full market value on the following January 1, the same as a homestead. For non-homestead property the definition is broader. A sale resets it. So does a transfer of more than 50% of the ownership interest in the entity that holds the property, which catches investors who sell the LLC rather than the deed. Some transfers are exempt: correcting a deed, transfers between spouses, and transfers where the beneficial ownership does not change, such as moving a property you already own into your own single-member LLC. Get advice before restructuring; a reset on a long-held commercial parcel can double the county line.
New construction and additions are assessed at market value in the first year and then fall under the cap, so a substantial renovation partially resets the base.
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What investors should budget
Budget the year after acquisition on full market value for every levy, because the reset will already have happened. In later years the cap gives you a ceiling on the non-school portion, which is useful for underwriting a hold. Compare the seller's bill to your projection before you bid; on a property the seller has owned since 2012 the difference can be large. Our property tax estimator lets you run the purchase price against any county's millage, and the reset timing is explained in why Florida property taxes rise the year after you buy.
There is no homestead exemption on non-homestead property, no portability, and no early-payment discount beyond the standard November schedule. What you do have is the same right to appeal an inflated market value, on the same 25-day clock, described in how to appeal a Florida property assessment.
Converting between homestead and non-homestead
Moving out of a homestead and renting it converts the property to non-homestead on the next January 1. You lose the exemption and the 3% cap, and the assessment resets to market value before the 10% cap begins. Renting a homestead for more than 30 days a year in two consecutive years also forfeits the exemption. The reverse conversion, buying a rental and then moving in, lets you apply for homestead and start the 3% cap from the first January 1 you qualify. Snowbirds who split time between states should read the residency rules in our homestead exemption guide before assuming either cap applies.
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For a non-homestead purchase the proration works the same way as any other Florida closing: the seller credits the buyer for the seller's share of the year on the old bill, and the buyer pays the November bill. The new assessment arrives the following year. If the seller's bill was capped for a decade, tell your lender to underwrite on the reset figure, not the file copy. The proration itself is covered in who pays property taxes at closing in Florida.
Related Reading
Save Our Homes Explained: Florida's 3% Cap and Who Gets It
The 1992 amendment limits homestead assessment increases to 3% a year or inflation, whichever is lower.
Why Florida Property Taxes Jump the Year After You Buy
The bill prorated at closing belongs to the seller's assessment and exemptions.
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Frequently Asked Questions
What is the 10% cap on Florida property taxes?
A limit on how much the assessed value of non-homestead property, such as rentals, second homes and commercial property, can rise each year for county, city and special-district taxes. It does not apply to school taxes.
Does the 10% cap apply to school taxes in Florida?
No. School district levies are calculated on full market value every year, which is why the school line on an investment property bill can rise faster than the rest.
Does selling an LLC reset the 10% cap?
Transferring more than 50% of the ownership interest in the entity that holds the property is treated as a change of ownership and resets the assessment to market value.
Can I get a homestead exemption on a rental property in Florida?
No. Homestead exemption requires the property to be your permanent residence. Rentals and second homes fall under the 10% non-homestead cap instead.
What happens to my taxes if I rent out my homestead?
The property becomes non-homestead on the next January 1. You lose the exemption and the 3% cap, the assessment resets to market value, and the 10% cap applies from then on.
Is there portability for non-homestead property in Florida?
No. Portability only transfers the Save Our Homes benefit between homestead properties.