So let’s go back to our example with Grandma. She bought her house for $150,000, and so her initial Market Value and Assessed Value were therefore about that amount. As the years went by, her Market Value kept going up and up, but her Assessed Value crept up slowly at around 2%-3% a year (most of the time in recent history CPI has been lower than 3%). After 10 years, Grandma’s house value went past $750,000. Everyone in the family thought it was cool that Grandma lived near the beach, but it was getting old with all the kids having to come over and do all the maintenance on that beach house. Everyone started talking about how it might make more sense for Grandma to move to a nice condo in a really beautiful assisted living community since she was now another 10 years older and having a little trouble getting around. About that time though, one of the kids, who was good at math said "Wait a second! Her property tax bill is only about $2,000 a year, and that condo we are talking about her buying is $800,000! Sure we can sell her house for $750,000, and it’ll only be another $50,000 to buy the condo, but then she’s going to have a tax bill of about $15,000 a year!" So since that would wipe out most of Grandma’s social security income everyone sighed and Grandma had to stay in the beach house. But one day, some smart legislators came along and said "This is stupid. If we let Grandma move to the condo then her beach house gets sold and the new person who buys it for $750,000 will be paying $15,000 a year in taxes on it, and they will probably spend a bunch of money to fix it up. Also if she sells then she’ll buy the $800,000 condo and the Realtors will make commissions, the construction people working on the new house get to earn some money, it’ll be way better for the economy!" And those smart legislators passed a law that said "OK, Grandma can take her Homestead Savings with her to her next house in Florida so long as she does it within a reasonable period of time, and we aren’t going to give her the whole $600,000 ($750,000 Market Value - $150,000 Assessed Value), we are going to cap it at $500,000 so we make out with a little extra on these deals. And thus was born what we in Florida call "Portability." The Portability laws were passed in 2008 and since then when you sell a Homestead Property in Florida you can take up to $500,000 of your Homestead Savings with you two your next home in Florida. However, there are 2 catches: (1) you have to establish your new Homestead within 2 tax years of when you sell or relinquish your prior Homestead, and (2) if you don’t buy another home with the same or higher Market Value as the one you sold/relinquished, then you don’t get all of the Homestead Savings, you get a percentage equal to the ratio of the prior and the new home. So, two quick examples to help with the two "catches": (1) If you sold your home in 2017, and you bought your new home and moved in around April, 2018, you have to buy and move into your homestead by the end of the year following the year in which you sell your present homestead or relinquish its homestead status (for example if you let it become a rental priority). (2) You sell your prior home which has a Market Value of $800,000, and your Assessed Value was $400,000. So you have $400,000 in Homestead Savings. You buy a new home in Florida that has a Market Value of $700,000. Assuming you are within the required timeframes for Portability, you will be able to move over your $400,000 in Homestead Savings, but it gets multiplied by the ratio of the new home’s Market Value to the prior Home’s Market Value ($700,000/$800,000) so you only get $350,000 in Homestead Savings on the new home. This means that in addition to any other applicable exemptions on your new home, you can subtract $350,000 from the new home’s Market Value in determining the Assessed Value on which you will pay taxes.