7 Little-Known Tax Breaks for Retirees in Florida (One is Very New and Rarely Used!)
Looking to keep more money in your pocket during retirement?
If you live in (or plan to move to) Florida, you’re already ahead of the game.
But here’s the thing:
Most retirees are leaving thousands of dollars on the table by missing these lesser-known tax advantages.
Let me show you exactly how these tax breaks work — and how to claim them before it’s too late.
1. Zero State Income Tax (But There’s More to It)
How it works: Florida charges 0% state income tax. But the real power comes from what’s NOT taxed.
Real-world example: Meet Robert, who moved from New York to Florida last year. In New York, his $45,000 annual pension and $20,000 in 401(k) withdrawals cost him nearly $3,800 in state taxes.
In Florida? That’s $3,800 back in his pocket — every single year.
But Robert doesn’t just save on those obvious income sources. His Social Security benefits and IRA distributions are completely tax-free at the state level too.
Action step: If you’re splitting time between Florida and another state, make sure you establish Florida as your legal domicile (more than just owning property) to claim this benefit.
2. Homestead Exemption (With Hidden Senior Bonuses)
How it works: The basic exemption reduces your home’s taxable value by $50,000. But seniors get extra perks many don’t claim.
Real-world example: Maria owns a $300,000 home in Sarasota County. The basic homestead exemption reduces her taxable value to $250,000.
But because she’s 67 and her income is under $34,000, she qualifies for the additional senior exemption. This drops her taxable value by another $50,000 to just $200,000.
Result? Her annual property tax bill is $1,200 lower than her neighbor with an identical home who didn’t claim both exemptions.
Action step: Visit your county property appraiser’s website and search for “senior exemption” or call them directly. The deadline to apply is typically March 1st each year.
3. Sales Tax Exemptions That Add Up Fast
How it works: While Florida’s 6% sales tax is unavoidable on many purchases, key categories that retirees spend heavily on are completely exempt.
Real-world example: The Williams family keeps track of their spending and found they save approximately:
- $312/year on prescription medications
- $520/year on groceries
- $80/year on medical equipment
That’s over $900 annually without any paperwork — these exemptions are automatic at checkout.
Action step: Time major purchases like energy-efficient appliances during Florida’s tax holidays (usually in May or August) to stack additional savings.
4. The “Longtime Resident” Discount Few Know About
How it works: If you’ve lived in your Florida home for 25+ years and meet income requirements, you can receive additional property tax exemptions beyond the standard homestead benefit.
Real-world example: James and Eleanor have owned their Tampa home since 1995. After their 25th year of ownership in 2020, they applied for the longtime resident exemption.
With a household income under $32,000, they qualified for an additional $25,000 exemption, saving them roughly $475 annually on property taxes.
Action step: Look for “longtime resident” or “senior longtime homeowner” exemptions on your county tax assessor’s website.
5. Save Our Homes Cap (Your Protection Against Tax Spikes)
How it works: This provision limits annual increases in your home’s taxable value to just 3%, regardless of how much your property appreciates.
Real-world example: Susan bought her Naples condo for $200,000 in 2015. By 2023, similar units were selling for $400,000 (a 100% increase).
Without the Save Our Homes cap, her property taxes could have doubled. Instead, the maximum annual increase was capped at 3% each year, meaning her taxable value in 2023 was only about $252,000.
This saved her approximately $2,800 in property taxes in 2023 alone.
Action step: This protection is automatic once you claim homestead exemption, but resets if you move. Factor this into any decisions about downsizing within Florida.
6. No Estate or Inheritance Tax (A Huge Advantage)
How it works: Unlike many states, Florida charges zero state-level estate or inheritance taxes when you pass assets to your heirs.
Real-world example: The Thompson family inherited their parents’ $2 million estate. If they had lived in a state like Massachusetts, the heirs would have paid approximately $99,600 in state estate taxes.
In Florida? $0 in state taxes, allowing the entire inheritance to benefit the family.
Action step: While federal estate taxes still apply to estates over $13.61 million (2024 figure), most Florida retirees won’t need to worry about this. Still, consult an estate planning attorney to maximize this benefit through proper will and trust planning.
7. NEW: Florida Senior Tax Credit (2024’s Game-Changer)
How it works: This refundable credit reimburses qualifying seniors for sales tax expenses, up to $500 annually.
Real-world example: Barbara, age 68, lives on $38,000 annually from Social Security and a small pension. She claims the new Senior Tax Credit when filing her 2024 taxes.
By submitting receipts showing $8,000 in taxable purchases (subject to Florida’s 6% sales tax), she receives a $480 refundable credit — money back in her pocket that she wouldn’t have received before 2024.
Action step: Keep all receipts for taxable purchases throughout the year or use the IRS sales tax tables to estimate your credit. You’ll claim this when filing your federal tax return.
8. BONUS: Senior Renters’ Property Tax Refund (Almost Nobody Claims This)
How it works: This newly expanded program recognizes that landlords pass property tax costs to renters, and provides qualifying senior renters with a partial refund.
Real-world example: Frank, 72, rents an apartment in Orlando for $1,200/month. His income is $36,000/year, and he’s lived in Florida for 8 years.
By applying for this refund, he receives $450 back — representing a portion of the property taxes his landlord paid but included in Frank’s rent.
Action step: Request Form DR-RP from your county tax collector’s office. Applications typically open in January and close in April each year.
The Bottom Line: Stack These Benefits
The real power comes from combining these tax breaks. Let’s look at a comprehensive example:
The Combined Effect: A 70-year-old Florida couple with $60,000 annual retirement income and a $275,000 home could save approximately:
- $3,000+ in state income taxes (compared to high-tax states)
- $2,000+ through homestead and senior exemptions
- $900+ from sales tax exemptions
- $500 from the new senior tax credit
That’s $6,400+ in annual tax savings — money that stays in your retirement accounts instead of going to the government.
Key takeaway: Most of these benefits aren’t automatic. You must apply for them. Set a calendar reminder each January to review which tax breaks you qualify for.
GRANT CARDONE’S FLORIDA WEALTH STRATEGY
“Listen up – Florida isn’t just a retirement destination, it’s a wealth-building machine.” – Grant Cardone
As Florida resident and real estate mogul Grant Cardone tells you:
“Don’t just save on taxes in Florida — USE these savings to create real wealth.”
Here’s what Cardone advises Florida retirees to do with their tax savings:
- 10X Your Investments, Not Just Your Savings: “That $6,400 in annual tax savings? Don’t just put it in a savings account getting 1%. Invest it in income-producing real estate that can generate 6-8% cash flow PLUS appreciation. In 10 years, that’s not $64,000 saved — it could be $100,000+ in wealth created.”
- Use Florida’s Property Laws To Your Advantage: “Florida’s homestead protection isn’t just a tax break — it’s asset protection. Your primary residence is protected from creditors. This means you can be more aggressive with investments elsewhere knowing your home is secure.”
- Leverage The Snowbird Strategy: “You don’t need to live in Florida 365 days a year. Establish legal residency (183+ days), get ALL the tax benefits, then travel during hurricane season. Your money should work harder than you do.”
- Consider Multi-Family Properties: “Many retirees downsize to condos, but consider a duplex or triplex instead. Live in one unit, rent the others. The rental income is Florida tax-free, and you still get all the homestead benefits on your portion.”
- Think Bigger: “Most retirees play defense with money. In Florida, play offense. The money you’re not paying in taxes? That’s capital you can use to create streams of income that will outlast your retirement accounts.”
As Cardone says: “Florida doesn’t just let you keep more money. It gives you the freedom to USE that money to build generational wealth.”
What Florida tax breaks have you successfully claimed? Drop a comment below!
