The money side of downsizing in Tampa

What it costs to sell a home in Tampa

In Florida, who pays which closing cost is set by the contract and local custom, not by law, and almost everything can be negotiated. These are the costs sellers in Hillsborough County most often cover.

Sources: Florida Department of Revenue, documentary stamp tax; Florida Realtors, NAR settlement FAQs.

Homestead exemption and Save Our Homes portability

The homestead exemption

If you own a Florida home and live in it as your permanent residence on January 1, you can claim the homestead exemption. The first $25,000 of assessed value is exempt from all property taxes. A second exemption applies to assessed value above $50,000 and to non-school taxes only. That second amount is now indexed to inflation and is $26,411 for 2026, for a combined exemption of up to $51,411 on non-school taxes.

File Form DR-501 with the Hillsborough County Property Appraiser by March 1 of the year after you buy. You can file online or at the downtown office at 601 E. Kennedy Blvd., 15th Floor.

The Save Our Homes cap

Once a home has a homestead exemption, its assessed value can rise by no more than 3 percent a year or the change in the Consumer Price Index, whichever is lower. After many years in the same home, the gap between market value and assessed value can be large. That gap is your Save Our Homes benefit.

Taking the benefit with you (portability)

When you sell a Florida homestead and buy another Florida home, you can transfer up to $500,000 of that benefit to the new home. You must establish the new homestead within three years of January 1 of the year you gave up the old one, and file Form DR-501T along with your homestead application.

When downsizing, the benefit is prorated. If the new home's market value is lower than the old one, you transfer a share of the benefit in proportion to the difference in value. A simple hypothetical: if your old home's market value was $600,000 with a $200,000 benefit, and your new home's market value is $300,000 (half as much), you would carry over half the benefit, or $100,000.

Two things catch people off guard:

• Your new home is reassessed at full market value. After any sale, the property is reassessed on the next January 1. The seller's tax bill on a listing tells you little about what yours will be.
• Portability applies only within Florida. Moving to another state ends the benefit.

Sources: Florida DOR, PT-112 Save Our Homes and portability; Florida DOR, indexed homestead exemption amounts.

Senior exemptions in Hillsborough County

Florida law lets counties and cities offer two additional exemptions to homeowners who are 65 or older and whose household income is at or below a limit set each year. For 2026 the income limit is $38,686 (adjusted gross income for all household members for the prior year). These exemptions apply only to the taxes of the county or city that adopted them, never to school taxes.

The long-term resident exemption can cover the full assessed value for the adopting government's taxes. It requires meeting the income limit, having lived in the home for at least 25 years and having a home with a market value under $250,000 when you first qualify. If you are moving after 25 years in one home, this is worth weighing before you sell, since the exemption does not transfer.

Apply with Form DR-501SC through the Property Appraiser. If your income rises above the limit, you must notify the Property Appraiser by May 1.

Other exemptions to ask about

• Widow or widower: $5,000
• Blind: $5,000
• Disability: $5,000, with a separate total exemption for qualifying total and permanent disability
• Veterans: $5,000 for a service-connected disability of 10 percent or more, a full exemption for 100 percent permanent service-connected disability and a percentage discount for veterans 65 and older with a combat-related disability

Sources: Hillsborough County Property Appraiser; Florida DOR, additional homestead exemptions for persons 65 and older.

Homestead tax deferral

If property taxes are a strain while you plan your move, Florida's homestead tax deferral program lets qualifying owners postpone some or all of their taxes. Homeowners 65 and older may defer the portion of taxes above 3 percent of household income, or the full amount if their income is below the senior exemption limit. Deferred taxes become a lien on the home with interest capped at 7 percent, and they come due when the home is sold or no longer your homestead.

Apply with Form DR-570 to the Hillsborough County Tax Collector by March 31. Because the deferred balance is paid from your sale proceeds, factor it into your budget if you plan to downsize soon.

Florida state taxes

Florida has no state personal income tax and no state estate tax, so a gain on the sale of your home is not taxed by the state. Federal rules still apply.

Capital gains basics

Under federal law you can generally exclude up to $250,000 of gain on the sale of your main home, or $500,000 for married couples filing jointly, if you owned and lived in the home for at least two of the five years before the sale. You can generally use the exclusion once every two years. There is an exception for owners who move into a licensed care facility, and inherited homes usually receive a new tax basis at the date of death.

Long-time owners in parts of Tampa that have appreciated significantly may have gains above these limits. Keep records of improvements you have made, since they add to your basis. See IRS Publication 523 and talk with a tax professional.

Next steps

Put these numbers to work in the step-by-step Downsizing Guide, or get matched with a local downsizing specialist who can estimate your net proceeds and help you time the sale and purchase.