For many Florida homeowners, the homestead exemption and the Save-Our-Homes (SOH) cap are among the most valuable financial protections offered under state law. These tax benefits can save families thousands of dollars every year by limiting how much a property’s assessed value can increase. But what many homeowners don’t realize is this:
The SOH cap is fragile — and in many cases, it disappears when the homeowner dies.
That means heirs may inherit the home they love… but not the low tax bill that made it affordable.
Fortunately, Florida law provides several estate-planning tools that can help preserve these tax benefits. But the rules are detailed, the deadlines strict, and the strategies must be implemented correctly to avoid costly mistakes.
This blog breaks down how the Save-Our-Homes cap actually works, what happens to it when the homeowner passes away, and the legal planning techniques that can protect your heirs from sudden property tax spikes.
Understanding the Save-Our-Homes (SOH) Cap
The SOH cap limits annual increases to the assessed value of a Florida homestead to the lesser of 3% or the Consumer Price Index (CPI). This cap applies only to homesteaded property and remains in place as long as the owner retains the home as their primary residence.
Over time, this creates a large gap between the market value and the assessed value.
That gap equals tax savings.
For example:
- Market value: $550,000
- Assessed value capped at: $205,000
- Taxes owed on $205,000 instead of $550,000
This difference can save a homeowner thousands per year.
But this benefit doesn’t automatically transfer to heirs.
What Happens to the SOH Cap When a Homeowner Dies
When the homeowner passes away, the property may undergo a full reassessment unless certain conditions are met.
Your file explains this clearly:
Florida Statute §193.155(8)(a) determines whether a “change of ownership” occurs. When a change of ownership happens, the assessed value is reset to full market value on January 1 of the following year — and the SOH cap is lost.
For heirs, this can mean:
- A massive increase in annual property taxes
- Difficulty affording the family home
- Pressure to sell the property
But not all transfers result in a loss of the SOH cap.
Transfers That Do Not Trigger a Loss of the SOH Cap
Certain transfers are protected under Florida law. These include:
1. Surviving spouse
A transfer to a surviving spouse does not count as a change of ownership if the spouse continues to use the property as their primary residence.
2. Joint Tenancy with Right of Survivorship (JTROS)
If the property was jointly owned and the surviving owner already used the home as their primary residence, the SOH cap can remain.
However, the survivor must file:
- DR-501 — Homestead Exemption
- DR-501T — Portability Application
By March 1 of the year following the owner’s death.
Failure to meet these deadlines may cause the cap to be lost even when the law would otherwise protect it.
3. Tenancy by the Entireties (married couples)
This is treated similarly to JTROS for married individuals.
4. Certain transfers into or out of revocable trusts
If the trust is properly drafted so that the owner retains beneficial interest during life, the SOH cap is not affected.
However, the transfer after death from the trust to heirs may trigger reassessment unless the heir qualifies for homestead on their own.
Transfers That Do Trigger Loss of the SOH Cap
The following situations typically result in full reassessment:
1. Transfer to children who do not live in the home
A child who inherits a property but does not make it their primary residence will lose:
- The homestead exemption
- The Save-Our-Homes cap
This is one of the most common — and most expensive — misunderstandings Florida families face.
2. Transfer to multiple siblings
Even if one child intends to live in the home, as long as at least one sibling does not, full reassessment usually applies.
3. Transfers under a will without careful homestead language
Poorly drafted wills often cause reassessment because they do not preserve the owner’s homestead rights for continued use by qualified heirs.
4. Improper trust drafting
A trust that does not clearly identify the property as homestead — or allows non-qualified beneficiaries rights that break homestead protections — may cause the SOH cap to be lost.
How Your Heirs Can Preserve the SOH Cap (If Eligible)
Florida allows certain heirs to maintain or recapture homestead protections through Portability and proper documentation.
To preserve the SOH cap, heirs must:
- Move into the home and establish it as their primary residence
- File DR-501 for homestead
- File DR-501T for portability
- File by March 1 of the year after the owner’s death
If done correctly, heirs may receive the deceased homeowner’s SOH benefit transferred to their own homestead assessment — significantly reducing taxes.
But the window is short, and documentation must be exact.
Legal Tools for Preserving the SOH Cap
Your uploaded file outlines several estate-planning tools that can help families preserve tax benefits. Here are the most effective strategies:
1. Joint Tenancy with Right of Survivorship (JTROS)
Best when: The co-owner already lives in the home.
If a qualified co-owner remains in the property, the SOH cap can remain — but only when:
- The survivor was already a homesteader
- The correct forms are filed
- Ownership was correctly titled before death
Warning:
JTROS may expose the property to creditors of the co-owner, cause gift-tax issues, and reduce control. This makes it unsuitable for many families.
2. Enhanced Life Estate Deed (Lady Bird Deed)
Often the best tool for Florida homestead planning.
A Lady Bird Deed:
- Allows the homeowner to keep 100% control during life
- Avoids probate
- Does not disturb the SOH cap during life
- Automatically transfers the home on death
If the beneficiary moves into the home and files the required forms, they may recapture tax benefits.
If not, the SOH cap is lost — but the deed avoids the risks associated with joint ownership.
3. Revocable Living Trust with Proper Homestead Provisions
A trust can successfully pass homestead property and protect beneficiaries — but only when drafted correctly.
A trust must:
- Identify the property as homestead
- Limit beneficiaries to those who would qualify under Florida law
- Avoid giving non-qualified individuals control
When done correctly, a trust gives more flexibility than a deed while maintaining SOH protections.
4. Life Estate Remainder Interests (traditional)
Unlike a Lady Bird deed, a traditional life estate deed transfers ownership rights immediately — which may:
- Trigger gift-tax reporting
- Expose the home to heirs’ creditors
- Cause Medicaid issues
This tool can preserve the SOH cap in limited situations, but it is rarely the best choice.
Common Mistakes That Cost Families Thousands
Based on the patterns highlighted in your file, here are the biggest errors homeowners make:
Mistake #1 — Assuming children automatically inherit the tax benefits
They don’t. They must qualify for homestead and file on time.
Mistake #2 — Adding a child to the deed without understanding the consequences
This risks the SOH cap, creditor issues, and permanent loss of control.
Mistake #3 — Choosing the wrong ownership form
For example, using tenants-in-common instead of JTROS causes reassessment.
Mistake #4 — Not updating deed or trust language
Outdated documents may unintentionally trigger a change of ownership.
Mistake #5 — Missing the March 1 filing deadline
This is one of the most frequent — and most expensive — errors heirs make.
Final Thoughts
Florida’s Save-Our-Homes cap is one of the most powerful tools for protecting families from escalating property taxes. But without proper planning, the SOH cap disappears after death — leaving heirs to face a dramatically higher tax bill. Proper legal steps, including using the right estate documents and understanding when a Power of Attorney is needed, can help ensure your family maintains these valuable protections.
By using the right estate-planning strategies, correctly structuring ownership, and understanding the complex rules around homestead transfers, you can ensure your heirs receive not only your home, but the financial protection that makes that home sustainable.
The key is planning early and making legally informed decisions.
Call to Action
If you want to ensure your heirs keep your tax benefits — and avoid costly mistakes — Lumsden Law can help you design a plan that protects both your home and your family.
Visit: www.lumsdenlawfirm.com
Schedule a consultation to safeguard your homestead and preserve your legacy.
FAQs
1. Does the Save-Our-Homes cap automatically transfer to my children when I die?
No. Children do not automatically inherit the SOH cap. To preserve the tax benefit, an eligible heir must move into the home, establish it as their primary residence, and file the required homestead and portability forms before the March 1 deadline.
2. What documents must heirs file to keep or transfer the SOH cap?
Eligible heirs must file DR-501 (Homestead Exemption) and DR-501T (Portability Application) with the county property appraiser. These forms must be submitted by March 1 of the year following the homeowner’s death.
3. What is the best way to preserve the SOH cap for my heirs?
The most effective tools are Lady Bird Deeds, properly drafted revocable trusts, and in some cases JTROS—but only when structured correctly. Each strategy has pros and cons, so legal guidance is essential.
4. What happens if multiple siblings inherit the home?
If even one sibling does not use the home as their primary residence, the SOH cap is usually lost. This often triggers full reassessment at market value and significantly higher property taxes.