Who Keeps the Tax Break? How an Orlando Divorce Affects Your Homestead Exemption
When spouses divide a house during an Orlando divorce, the conversation usually centers on equity, mortgage payments, and who stays with the kids. The property tax benefits attached to that house rarely come up. For couples who have owned their home for years, that oversight can be expensive, because divorce can quietly shift or shrink those savings.
The Save Our Homes Cap Is the Hidden Asset
A Florida homestead exemption does more than lower your taxable value. It also triggers the Save Our Homes cap. Under Florida Statute 193.155(1), the assessed value of a homestead can rise by no more than 3 percent per year or the change in the Consumer Price Index, whichever is lower. After a decade of rising home prices, the gap between your home’s market value and its assessed value can easily reach six figures.
Normally, that gap disappears when a home changes hands. Divorce is an exception. Under Florida Statute 193.155(3)(a)2, a transfer of title between spouses due to a dissolution of marriage does not count as a change of ownership. If you keep the marital home and continue living there, your capped assessment generally stays intact.
Portability Gives the Departing Spouse Something, but Not Always
The spouse who moves out may be able to carry some of those savings to a new home. Florida Statute 193.155(8) allows a homeowner who held a homestead exemption within the prior three years to transfer the accumulated savings to a new homestead, up to $500,000.
When jointly titled property is abandoned, those savings are generally divided equally among the owners who received the exemption. Imagine a home worth $480,000 on the market but assessed at $280,000. That $200,000 difference would typically be split, giving each spouse $100,000 in portable savings.
Here is where it gets tricky. The statute conditions any transfer on the old home being reassessed after it is abandoned. If one spouse keeps the house along with its low assessment, the other spouse’s portability may be limited or lost. Both spouses cannot always walk away with the full benefit, which makes the tax savings a real point of negotiation.
Timing Matters More Than Most People Expect
Florida allows married couples abandoning jointly titled property to designate how the ownership share will be divided for portability purposes, rather than accepting an automatic 50/50 split. However, the spouses must still be married on the date the property is abandoned, and the sworn designation is irrevocable once filed. Wait until after the final judgment, and that option may be gone.
Before signing a marital settlement agreement, it helps to address a few questions:
- Which spouse will remain in the home and continue claiming the exemption?
- Will the home be reassessed, and how will that affect portable savings?
- Should the portability split be equal or allocated differently?
- How should the long-term tax savings factor into the overall property division?
Talk to Us Before You Sign Anything
A homestead exemption never appears on a bank statement, which is exactly why it gets overlooked. Over the next decade or more, the right approach could save you thousands in property taxes. Our Orlando property distribution attorneys look at the full financial picture, including the value hiding in your tax bill. If your divorce involves a home you own together, reach out to Steve Marsee, P.A. at 407-521-7171, and we will help you understand what you stand to keep.
Source:
flsenate.gov/Laws/Statutes/2025/193.155