Maybe, depending on how you own the property (the “tenancy”), and if the new owner files for Homestead Exemption on your property. “Tenancy” is the term used to describe the way property is owned, the relationship between the owners, and what happens to the property when an owner dies. The most common forms of tenancy are: tenancy by the entireties, joint tenants with right of survivorship, and tenants in common. If two or more people own property with a homestead exemption, the type of tenancy that appears on the deed can have an effect on the “Save Our Homes” provision, and ultimately the amount of taxes that are owed.
If the new owner is your spouse, or someone who is legally or naturally dependent on you, he or she must apply for homestead exemption. Your current Save Our Homes cap will not be adjusted.
Joint Tenants with Right of Survivorship:
If the new owner is a joint tenant with right of survivorship, and he or she DOES NOT apply for Homestead Exemption, your SOH cap WILL NOT be adjusted.
If the new owner is a joint tenant with right of survivorship and DOES apply for Homestead Exemption, your SOH cap WILL be adjusted to market value and start anew the following year. In future years, the SOH Cap will protect 100% of the property.
One Important Note! If the new owner is living with you and intends to make the property his or her permanent residence, it may make more sense to apply for the new Homestead Exemption now rather than waiting until a later date. Your Homestead Exemption and SOH cap protects only you, and not the new owner. In the future if you no longer reside in this home, the new owner will have to apply at that time, and the property value and taxes will most certainly be much higher than they are now.
Tenants in Common
If the new owner is a tenant in common and DOES NOT apply for homestead exemption, your SOH cap WILL BE adjusted to protect only your proportionate or “percent” interest in the property. The “percent” interest of any owner who does not have homestead exemption will be assessed at market value each year.
If the new owner DOES apply for Homestead Exemption, your SOH cap WILL BE adjusted to market value and start anew the following year.