The Florida non-homestead 10% assessment cap, explained for Miami investors

Last updated: June 2026

Florida caps how fast a property's assessed value can grow for tax purposes, but the rules are different depending on whether the property is a homestead, a second home, or an investment. For Miami-Dade buyers and sellers in 2026, the non-homestead 10 percent assessment cap is one of the most relevant pieces of that system. It limits the annual increase in assessed value for certain non-homestead properties, but it does not limit the tax rate or the overall tax bill. This article explains how the cap works, which properties it covers, and how it affects your cost basis and your resale timeline. The rules are state-level, so I have sourced them directly from the Florida Department of Revenue.

What the non-homestead 10% cap does

Florida limits the annual increase in assessed value of non-homestead real property to 10 percent, as provided by Section 193.1554, Florida Statutes [1]. This is different from the more widely known Save Our Homes 3% cap for homestead properties. The non-homestead cap applies to non-homestead residential property, as defined in Section 193.1555, and also to nonresidential property, as defined in Section 193.1554 [1]. The limit is on the assessed value used to calculate taxes, not on the actual tax dollars you pay, which can still rise if millage rates increase or if special assessments are added.

There is a subtle but important distinction in the law. Section 193.1555 applies to non-homestead residential property, which is residential property that does not qualify for homestead exemption [1]. Section 193.1554 applies to nonresidential property, which includes commercial and other non-homestead uses [1]. The 10 percent cap applies to both, but the statutory classification matters for how the property is assessed.

How it affects Miami-Dade investors and second-home buyers

For a non-homestead residential property in Miami-Dade — a second home, a vacation condo, or a rental — the cap matters because it smooths your annual tax increase. If market values rise 20% in a year, the assessed value can still only go up 10%. That limits the tax shock during a hot market. However, the cap does not transfer when the property sells. A new purchase resets the assessed value to the sale price, which is the new basis for tax purposes. That is why buyers often underestimate their first-year tax bill: the previous owner's capped assessment does not follow you.

This is especially important in Miami's high-turnover luxury markets, where buyers frequently purchase non-homestead condos and single-family homes. A unit that was taxed on a $2 million capped assessment may be sold for $2.8 million, and the new owner's tax basis will be closer to $2.8 million. The cap gave the seller predictable tax growth, but the buyer inherits the reset.

How it differs from Save Our Homes

Homestead properties are governed by Save Our Homes, which caps annual assessed-value increases at 3% or the Consumer Price Index, whichever is lower [2]. Homestead also has portability, which allows a homeowner to transfer up to $500,000 of the accumulated cap difference to a new Florida homestead within a limited time frame [2].

The non-homestead cap does not have portability. It does not transfer to a new buyer. It is a year-to-year cap on the existing owner's assessment. For a buyer, that means the cap is a benefit for the current owner only, not a feature of the property you are buying. You should underwrite your tax expense using the purchase price as the assessed value, then apply the 10% cap for future-year projections.

The practical math for a 2026 purchase

Suppose you are considering a non-homestead Miami-Dade property with a purchase price of $3.5 million. The prior owner's assessed value might have been capped at $2.5 million. After closing, the property appraiser will typically reassess the property to a value close to the sale price, say $3.5 million. Your tax bill is based on the new assessment, not the prior owner's capped value. In future years, the assessed value can grow at a maximum of 10% per year under the cap, unless the market value drops below the capped value, in which case the assessment follows the market value.

This reset dynamic is why you should not rely on the seller's current tax bill as your budget. The tax expense after purchase is usually materially higher. A good rule of thumb for Miami-Dade is to model the post-sale tax bill at roughly 1.5% to 2% of the purchase price, depending on the municipality, school district, and special assessments, then adjust for the cap in subsequent years. For a precise estimate, check the property tax estimator on the Miami-Dade County Property Appraiser site or ask me to run it during a buyer consultation.

When the cap matters less

The 10% cap is valuable in rising markets, but it is irrelevant when market values are flat or falling. In that case, the property's assessed value is set at the lower market value, and the cap simply does not bind. It also does not apply to new construction or improvements that are not capped under the law. If you are renovating a non-homestead property, the added value from the improvement may be assessed separately in the first year and then subject to the cap in subsequent years. Always check with the property appraiser before you assume a renovation is capped.

How this affects your selling decision

Sellers sometimes hold non-homestead properties longer than planned because the tax basis is capped and low. That is a rational reason to hold, but it is not a reason to overprice the sale. The buyer will reset the tax basis at purchase, so the seller's tax benefit does not transfer into the buyer's offer price. The property is still worth what the market will pay. A listing valuation can help you separate tax benefit from market value.

Frequently asked questions

What is the non-homestead 10% cap in Florida?

Florida limits the annual increase in assessed value of non-homestead real property to 10% under Section 193.1554 and Section 193.1555, Florida Statutes [1]. It applies to non-homestead residential and nonresidential property, but it does not cap the actual tax bill or transfer to a new buyer.

Does the 10% cap transfer to a new buyer?

No. The non-homestead 10% cap does not transfer. A new buyer's assessment is typically reset to the purchase price. The cap applies to the current owner's annual assessment growth only.

How is the non-homestead cap different from Save Our Homes?

Save Our Homes caps homestead assessment increases at 3% or the CPI, whichever is lower, and includes portability up to $500,000 between Florida homesteads [2]. The non-homestead cap is 10%, does not apply to homesteads, and has no portability.

Does the cap apply to new construction?

New construction or improvements may not be fully subject to the cap in the first year. The added value is often assessed separately in the first year and then becomes subject to the cap in subsequent years. Verify with the local property appraiser.

Should a buyer budget based on the seller's current tax bill?

No. The seller's tax bill reflects the seller's capped assessed value. After purchase, the assessed value is typically reset to the sale price, so the buyer's tax expense is usually higher. Model taxes off the purchase price, not the seller's bill.

Sources

1. Florida Department of Revenue: Non-Homestead 10% Cap
2. Florida Department of Revenue: Save Our Homes

Gabriel A. Moyers, PA. eXp Realty. Florida License #3407280. Equal Housing Opportunity. This article is general information as of June 2026 and is not legal, tax, or financial advice. Verify current tax rules with the Florida Department of Revenue and the Miami-Dade County Property Appraiser before acting.