Second homes and rentals: how are they taxed?
A property that does not qualify as a homestead does not receive the homestead exemption or Save Our Homes cap. This page concerns fully nonhomestead second homes and rentals; mixed-use or partially rented homesteads need separate review. Residential property of nine units or fewer does have its own 10% annual limit, which applies to taxes from non-school authorities only. A qualifying change of ownership or control triggers reassessment at just value on the following January 1, subject to statutory exceptions. The previous owner's bill is not a guide to yours.
How it differs from a homestead
| Homestead (primary residence) | Second home or rental (residential, 9 units or fewer) | |
|---|---|---|
| Homestead exemption | Yes | No |
| Annual limit on assessed value growth | 3% or CPI, whichever is lower (Save Our Homes) | 10% |
| Applies to which levies | All levies | Non-school levies only |
| Resets after a sale | Yes | Yes |
The 10% cap does not reduce the school assessment. This example assumes no other exemptions; eligible exemptions can separately affect taxable value.
What this means for a buyer
- Do not estimate your bill from the seller's bill. Following a qualifying change of ownership or control, the capped assessment is reset to the Property Appraiser's just value on the following January 1. Statutory transfer exceptions can apply.
- The timing creates a gap. For an ordinary qualifying purchase during 2026, the annual 2026 assessment reflects January 1, 2026; reassessment after that purchase ordinarily occurs January 1, 2027 and affects the 2027 bill. This does not determine closing prorations, exemption eligibility, or exceptional transfers. That jump can come as a surprise, and it can change an escrow payment after the first year.
- New improvements sit outside the limit. Additions and new construction are generally assessed at just value as of the first January 1 after substantial completion.
- Changes involving an entity. A transfer of control, or of more than 50% of ownership of the entity that owns the property, can count as a change of ownership or control, subject to the statute's definitions and exceptions.
Worked example (hypothetical numbers)
Assume a qualifying purchase of a fully nonhomestead rental house in 2026, no transfer exception, no exemptions, no additions and no non-ad valorem charges. The seller's non-school assessed value was $300,000. Assume the Property Appraiser determines just value of $400,000 on January 1, 2027; this is not assumed to equal the purchase price. Future-year steps illustrate current rules continuing unchanged, not a forecast.
- 1First year after the sale (2027 assessment): The assessed value resets to the just value of $400,000. The seller's $300,000 does not carry over.
- 2The next year (2028 assessment): Just value rises to $480,000. The 10% limit applies to non-school levies: Non-school assessed value: $400,000 × 1.10 = $440,000. School taxable value: $480,000 (the 10% limit does not apply).
- 3Assumed millage, for illustration only: 12.0 mills non-school, 5.5 mills school. Non-school tax: $440,000 ÷ $1,000 × 12.0 = $5,280. School tax: $480,000 ÷ $1,000 × 5.5 = $2,640. Total: $7,920.
- 4Without the limit: Non-school tax would be $480,000 ÷ $1,000 × 12.0 = $5,760, and the total would be $8,400. The limit saved $480 in this example.
What the 10% limit does not do
- It does not cap your tax bill. It limits how fast assessed value can rise for non-school levies.
- It does not limit rate increases, school taxes or non-ad valorem assessments.
- If just value falls below the assessed value, the assessed value drops to the just value.
- It does not apply to larger apartment buildings or to non-residential property, which have separate rules.
The rule behind it
- Florida Constitution, Art. VII, §4(g): The 10% annual limit on assessment increases for nonhomestead residential property of nine units or fewer, applying to non-school levies, with a reset on change of ownership or control. Read Art. VII, §4(g)
- Florida Constitution, Art. VII, §6: Homestead exemption for a permanent residence. Read Article VII, section 6(a)(1)
- Section 193.1554, Florida Statutes: Defines covered property, the 10% limit and the reset to just value on January 1 after a change of ownership or control, and lists transfers that do not count. Statute
- Official guidance: Florida DOR, Property Tax Information for First-Time Florida Homebuyers (Form PT-107). Form PT-107
Reflects Florida law as of October 11, 2026. Educational information only; not tax or legal advice. For questions about your property's value, contact your county Property Appraiser.