Real Estate Tax Deductions for Florida Homeowners: 2026 Guide
By Inna Moskalyk
Oct 20, 2025
Tax season brings questions for Florida homeowners: What can I deduct? Does the homestead exemption count on my federal taxes? Is itemizing worth it?
This guide breaks down both Florida state-level benefits (property tax reductions) and federal tax deductions (itemized deductions) to help you maximize your tax advantages as a Florida homeowner in 2026.
Two Types of Tax Benefits
Florida homeowners benefit from two distinct systems:
Florida State Benefits
These reduce your property taxes at the state/local level:
- Homestead Exemption
- Save Our Homes assessment cap
- Additional exemptions (senior, veteran, disability)
You claim these through the St. Johns County Property Appraiser-and they automatically reduce your annual property tax bill.
Federal Tax Deductions
These reduce your federal income taxes through itemized deductions:
- Mortgage interest deduction
- Property tax deduction (SALT)
- Points paid at closing
You claim these on your federal tax return if you itemize deductions.
Key distinction: Florida’s homestead exemption is NOT a federal deduction. They’re separate systems with separate benefits.
Florida Homestead Exemption (State)
The homestead exemption is Florida’s primary property tax relief for homeowners.
How It Works
The exemption reduces your home’s taxable value:
- First $25,000: Applies to ALL property taxes (including school taxes)
- Second $25,000: Applies to assessed values $50,000-$75,000 for NON-school taxes only
For most Florida homes valued at $75,000+, this provides the full $50,000 exemption for non-school taxes and $25,000 for school taxes.
Amendment 5 Update (2025)
Starting January 1, 2025, the second $25,000 exemption adjusts for inflation annually:
- 2025 adjusted amount: ~$50,722 (not flat $50,000)
- Recalculated each year based on Consumer Price Index
- Provides increasing value to long-term homeowners
Save Our Homes Protection
Once you have homestead exemption, the Save Our Homes cap limits annual assessed value increases to:
- 3% maximum annually, OR
- Consumer Price Index change (whichever is lower)
This can save substantial money over time as market values rise faster than your capped assessment.
Portability
Moving within Florida? You can transfer up to $500,000 of accumulated Save Our Homes benefit to your new property through portability.
Deadline: File with your new homestead exemption application by March 1.
For complete homestead exemption guidance, see our Homestead Exemption Guide.
Mortgage Interest Deduction (Federal)
The mortgage interest deduction is typically the largest tax benefit for homeowners who itemize.
What Qualifies
You can deduct interest paid on mortgages for:
- Your primary residence
- A second home (if you have one)
Deduction Limits
The amount you can deduct depends on when you took your mortgage:
Mortgage Originated
Limit (Single/MFJ)
Limit (MFS)
After Dec 15, 2017
$750,000
$375,000
Before Dec 16, 2017
$1,000,000
$500,000
Example: If your mortgage is $600,000 and your interest rate is 6.5%, you’re paying approximately $39,000 in interest annually-all potentially deductible (under current limits).
HELOC Interest
Home Equity Line of Credit (HELOC) interest is deductible only if the funds were used to “buy, build, or substantially improve” the home securing the loan.
Using HELOC for debt consolidation, vacations, or other purposes? That interest is not deductible.
2026 Considerations
The Tax Cuts and Jobs Act provisions expire after 2025. Congress may adjust mortgage interest deduction rules for 2026 and beyond. Consult a tax professional for the latest guidance.
Property Tax Deduction (Federal)
Florida homeowners can deduct property taxes on their federal returns-but there’s a significant limitation.
SALT Cap
Property taxes fall under the State and Local Tax (SALT) deduction, which is capped at:
- $10,000 total for single filers and married filing jointly
- $5,000 for married filing separately
This cap includes your combined:
- Property taxes
- State income taxes (N/A in Florida)
- OR state sales taxes (optional in Florida since there’s no income tax)
What This Means for Florida Homeowners
In high-value homes, you’ll likely hit the SALT cap quickly:
Example: A $500,000 home in St. Johns County might have ~$6,000 in annual property taxes. Add any state sales tax you’re deducting, and you’ll approach or exceed the $10,000 cap.
Why No State Income Tax Matters
Unlike New York or California residents who use much of their SALT cap on state income taxes, Florida residents can apply more toward property tax deduction. Still, the cap limits overall benefit.
Should You Itemize?
The mortgage interest and property tax deductions only benefit you if you itemize deductions instead of taking the standard deduction.
2025 Standard Deduction Amounts
Filing Status
Standard Deduction
Single
$14,600
Married Filing Jointly
$29,200
Married Filing Separately
$14,600
Head of Household
$21,900
When Itemizing Makes Sense
Itemizing is worthwhile when your total itemized deductions exceed the standard deduction:
Itemized deductions include:
- Mortgage interest
- Property taxes (up to SALT cap)
- Charitable contributions
- State income taxes (N/A in Florida)
- Certain medical expenses
Quick calculation:
For a married couple with a $400,000 mortgage at 6.5% ($26,000 interest) and $5,000 in property taxes:
- Mortgage interest: $26,000
- Property taxes: $5,000
- Total: $31,000
This exceeds the $29,200 standard deduction, making itemizing worthwhile.
When Standard Deduction Wins
If you have:
- A smaller or paid-off mortgage
- Lower property taxes
- Minimal other deductions
…the standard deduction often provides more benefit with less complexity.
Other Homeowner Tax Benefits
Home Office Deduction
Who qualifies: Self-employed individuals using part of their home “regularly and exclusively” for business.
What you can deduct:
- Simplified method: $5 per square foot (up to 300 sq ft)
- Actual expense method: Percentage of home expenses
Note: W-2 employees cannot claim home office deductions, even if working remotely.
Energy Efficiency Credits
The federal government offers credits for energy-efficient home improvements:
Residential Clean Energy Credit:
- 30% credit for solar panels, solar water heaters, etc.
- No annual cap through 2032
Energy Efficient Home Improvement Credit:
- Up to $3,200 annually for qualifying improvements
- Includes insulation, windows, doors, HVAC systems
- Subject to specific limits per category
These are credits (direct reduction of tax owed), not deductions-making them particularly valuable.
Capital Gains Exclusion (When You Sell)
When you eventually sell your primary residence, you can exclude:
- $250,000 in capital gains (single filers)
- $500,000 in capital gains (married filing jointly)
Requirements:
- Owned the home for at least 2 of the last 5 years
- Lived in it as primary residence for at least 2 of the last 5 years
This exclusion can save significant taxes when selling a home that has appreciated.
For timing considerations, see our guide on When to Sell Your Home.
Keeping Good Records
To maximize deductions and support any potential audit:
What to Track
- All mortgage interest payments (Form 1098 from lender)
- Property tax payments (from tax collector receipts)
- Points paid at closing (from closing disclosure)
- Home improvement receipts (for future capital gains calculations)
- Energy efficiency improvement costs and credits
How Long to Keep Records
- 3 years: From filing date for most tax documents
- 6 years: If income underreported by 25%+
- Until sale + 3 years: For home improvement records (affects cost basis)
Common Questions
Can I deduct HOA fees?
Generally, no. HOA fees are not deductible for personal residences. However, if you rent the property, HOA fees become a deductible expense against rental income.
What about home improvements?
Home improvements are not deductible in the year made. However, they add to your cost basis, reducing capital gains when you sell.
Exceptions: Some energy efficiency improvements qualify for credits (see above).
Do I need a tax professional?
For straightforward situations with one home and standard employment, tax software handles most homeowner situations.
Consider a tax professional if you:
- Have rental properties
- Are self-employed
- Made significant home improvements
- Have complex deduction scenarios
Does homestead exemption affect federal taxes?
No. Florida’s homestead exemption reduces your property taxes, but it’s not a federal deduction. You can still deduct the property taxes you actually pay (up to SALT cap) on your federal return.
Closing Costs at Purchase
Some costs paid when you bought your home may be deductible:
Potentially deductible:
- Points paid to obtain your mortgage (spread over loan life or in year paid if meeting criteria)
- Prepaid property taxes
- Prepaid mortgage interest
Not deductible:
- Title insurance
- Recording fees
- Documentary stamp taxes
For a complete breakdown, see our Florida Closing Costs Guide.
Ready to Maximize Your Benefits?
Understanding both Florida’s property tax benefits and federal deductions helps you keep more money in your pocket. For 2026:
- File for homestead exemption by March 1 if you haven’t already
- Gather your 1098 forms for mortgage interest
- Calculate whether itemizing beats the standard deduction
- Consult a tax professional for complex situations
Use our Mortgage Calculator to estimate your annual interest payments and potential deduction.
This guide provides general information. Tax laws change frequently. Consult a qualified tax professional for advice specific to your situation.
Inna Moskalyk is a St. Johns County real estate expert. For questions about buying or selling property in Northeast Florida, contact me.