How Does the Homestead Exemption Work in Key West?

Florida’s homestead exemption can reduce taxable value for a qualifying permanent residence in Key West. Eligibility generally depends on ownership and permanent residency as of January 1, followed by an application to the Monroe County Property Appraiser. The benefit is not automatic when you buy a home, and a seller’s exemption does not become yours. Proposed Amendment 3 could expand future benefits, with different rules based on when Florida residency begins; the changes still require voter approval.

How Much Is the Homestead Exemption?

For tax year 2026, qualifying owners with sufficient assessed value can receive a $25,000 exemption applying to school and non-school taxes, plus up to $26,411 applying only to non-school taxes on assessed value above $50,000. That makes the maximum combined non-school exemption $51,411.

These amounts reduce taxable value, not your tax bill dollar for dollar. Actual savings depend on the applicable millage rates. The additional non-school portion is adjusted annually for positive inflation; do not assume the 2026 amount will be the amount for a later tax year.

Who Qualifies and When Should You Apply?

The property must be your permanent residence, or the permanent residence of a qualifying dependent, with the required ownership interest as of January 1. A vacation home does not qualify simply because you spend time there.

The standard application deadline is March 1 of the tax year. For a buyer planning to qualify for 2027, the key dates are January 1, 2027 for eligibility and March 1, 2027 for timely filing. Confirm your circumstances and submission requirements with the Monroe County Property Appraiser.

Prepare ownership and residency documentation. The state lists possible evidence including a Florida driver license or ID, vehicle registration, voter registration when applicable, and proof that prior out-of-state residency ended. The appraiser determines eligibility and may request additional records.

Save Our Homes and Portability

Beginning after the first year a property receives homestead exemption, Save Our Homes generally limits annual assessment increases to the lesser of 3% or the applicable Consumer Price Index change. This limits assessed value, not the final tax bill.

Owners moving between Florida homesteads may qualify to transfer some or all of their accumulated assessment difference. Portability requires a separate application, Form DR-501T, along with the new homestead application. The state’s three-year timing rule runs from January 1 of the year the former homestead was abandoned—not simply three years from the sale date. Ask the appraiser to calculate your eligibility and transferable amount.

What Buyers Should Budget For

A seller’s tax bill may reflect years of assessment protection. A sale generally triggers reassessment at just value the following January 1, subject to applicable exceptions. Estimate taxes using your own circumstances, including any eligible portability, rather than assuming the seller’s bill will continue.

Read our Key West property tax guide for the broader ownership-cost picture. Our homestead information page shows the 2026 exemption bands and worked examples, including the different school and non-school taxable values.

What Could Amendment 3 Change?

As of October 21, 2026, these changes are proposed, not enacted. Amendment 3 goes before voters November 3, 2026, requiring at least 60% approval.

For eligible homesteads, the proposal would replace the current non-school exemption with up to $150,000 in 2027 and $250,000 in 2028, with annual inflation adjustments beginning in 2029. These are total exemption amounts, not additions to today’s exemption. The school-tax exemption would remain $25,000.

Residency Timing Matters

Permanent Florida residents established by December 31, 2026 could qualify for the larger exemption when they purchase and establish an eligible homestead. People becoming Florida residents on or after January 1, 2027 would initially receive a $50,000 non-school exemption, adjusted for inflation beginning in 2028. The larger benefit would become available January 1 of the fifth year after maintaining homestead exemption for four years.

What Would Stay the Same?

Save Our Homes and portability would remain. A larger exemption would not guarantee a particular dollar saving or eliminate non-ad valorem assessments. Future tax rates and implementation details would still matter.

For qualifying non-homestead property, including second homes and rentals, the proposal would lower the annual non-school assessment-growth cap from 10% to 5%. This is not a cap on the tax bill.

Further exemption increases could be authorized through future legislation; their timing and amounts are not settled. See our Amendment 3 overview and the official sources below.

Frequently Asked Questions

Does homestead exemption eliminate property taxes?

No. It reduces eligible taxable value. School and non-school levies receive different exemption treatment, and other charges can remain.

Can a condo qualify?

A qualifying permanent residence can receive the benefit; the decision turns on ownership and residency eligibility, not simply whether the home is a condo or a house.

Is the exemption transferred automatically at closing?

No. New owners must establish their own eligibility and apply. Portability concerns an eligible owner’s assessment benefit from a previous Florida homestead.

Can I claim it on a vacation rental or second home?

A property used only as a vacation home or investment rental does not qualify as your permanent residence. Renting a homesteaded residential unit can affect eligibility. Discuss any planned rental use with the appraiser before relying on the exemption.

What if I miss the filing deadline?

Contact the property appraiser promptly about any available late-filing procedures and applicable deadlines. Do not assume late approval or retroactive relief.

Is Save Our Homes a 3% cap on my tax bill?

No. It generally limits annual assessment growth after the first homestead year. Tax rates, improvements and other changes can affect the amount due.

Has Amendment 3 already changed these rules?

No. Voter approval is required. If approved, the first changes would take effect January 1, 2027.

Would every new buyer receive the larger exemption immediately?

No. Residency timing and homestead eligibility matter. New Florida residents starting in 2027 would face the phased eligibility described above.

Should I delay applying for homestead while the amendment is pending?

Follow the current eligibility and filing requirements. Ask the Monroe County Property Appraiser how any approved changes would apply to your situation.

For help comparing Key West ownership costs before buying or selling, contact Scott Forman, Broker/Owner of Royal Palms Realty. Exemption applications and eligibility decisions belong with the county property appraiser.