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Buying a Second Home in Palm Beach County (2026 Guide)

Buying a Second Home in Palm Beach County: A 2026 Guide

A second home in Palm Beach County is a place you own and use part of the year — not your primary residence, and not a full-time rental. With the county’s median sale price at about $538,000 in spring 2026 (Redfin), a seasonal escape here is a real investment. The financing, tax, and insurance rules differ from a primary purchase in ways that surprise a lot of buyers.

This guide is educational and isn’t tax, legal, or insurance advice. Confirm the specifics for your situation with a CPA, attorney, or licensed insurance agent before you buy.

High-rise waterfront condominium towers framed by tall palm trees along a sunny South Florida shoreline
Waterfront condos are the classic Palm Beach County second home — a lock-and-leave escape with a view and no yard to manage. Photo by Nina Hill on Pexels.

Most of the second-home buyers we work with already own a primary home somewhere else — often up north — and want a warm-weather base for the winter months. If that’s you, and you’re weighing a move or a seasonal footprint, our guide to relocating to Jupiter from the Northeast pairs well with this one. Here’s how to think through the money, the tax bill, the insurance, and the rental question before you fall for a view.

What exactly counts as a second home?

A second home is a one-unit property you occupy part of the year and control yourself — not a rental or a timeshare, per Fannie Mae’s 2026 occupancy rules. That one label, second home versus investment property, quietly sets your down payment, your mortgage rate, and how a lender treats any rent you collect.

Lenders sort every purchase into three buckets: primary residence, second home, or investment property. A second home sits in the middle — better loan terms than an investment property, but stricter rules than the home you live in full time. To qualify as a second home, Fannie Mae says the property has to be suitable for year-round use, kept under your exclusive control, and free of any management agreement that hands your occupancy to someone else.

Fannie Mae’s 2026 Selling Guide defines a second home as a one-unit property the borrower occupies for some portion of the year, keeps under exclusive control, and does not run as a rental or timeshare — and it can’t be subject to any agreement giving a management firm control over the occupancy (Fannie Mae, B2-1.1-01).

How much do you need to put down on a second home?

Plan on at least 10% down. Fannie Mae caps a second-home loan at 90% loan-to-value in its 2026 guidelines, so 10% is the floor — though plenty of buyers put 20% to 25% down to soften a higher rate. Investment properties usually ask for more, often 20% to 25% at minimum.

There’s a catch that trips people up: on a second-home loan, you can’t count future rental income to help you qualify. Fannie Mae underwrites the loan on your own income and reserves, full stop. An investment-property loan works the other way — the property’s projected rent can help you qualify, but you pay for that flexibility with a bigger down payment and pricier terms. Our financing overview walks through what to line up before you shop.

Fannie Mae’s 2026 guidelines allow a maximum 90% loan-to-value on a one-unit second home — 10% down — and rental income from a second home cannot be used for qualifying purposes. Investment-property loans require additional pricing adjustments and typically a larger down payment (Fannie Mae, B2-1.1-01).

Are second-home mortgage rates higher than on a primary home?

Usually, yes. Since April 2022, Fannie Mae and Freddie Mac have charged upfront fees on second-home loans of roughly 1.125% to 3.875%, scaled to your down payment (Fannie Mae). With only 10% down, that fee can push your rate close to a full percentage point above a comparable primary-home loan.

Those upfront fees, called loan-level price adjustments, get baked into either your closing costs or your interest rate. This guide won’t quote a specific rate — they move constantly, and yours depends on credit, down payment, and the lender — but the direction is reliable: a second home costs more to finance than the home you live in.

Local insight: The fee bites hardest at low down payments. Because the adjustment is tiered by loan-to-value, moving from 10% down to 25% down can meaningfully cut both the fee and your rate — one reason many Palm Beach County second-home buyers bring more cash to the table than they would on a primary purchase.

The Federal Housing Finance Agency introduced upfront fees on second-home loans sold to Fannie Mae and Freddie Mac effective April 1, 2022, ranging from 1.125% to 3.875% of the loan amount depending on loan-to-value — pricing that put second homes on roughly the same footing as investment properties (Fannie Mae, 2022).

The Florida property-tax surprise: no Homestead on a second home

This is the cost most buyers forget to budget. Florida’s Homestead exemption and its 3% Save Our Homes cap apply only to your permanent, primary residence (Palm Beach County Property Appraiser). A second home gets neither — so it’s taxed on full market value, with only a weaker 10% cap for any protection.

For a homesteaded Floridian, Save Our Homes limits how fast the taxable value can climb: no more than 3% a year, or the change in the Consumer Price Index, whichever is lower (2.9% for 2025). Your second home doesn’t get that. As a non-homestead property, its assessed value is instead held to a 10% annual cap — better than nothing, but it lets your taxable value rise more than three times faster. And you don’t get the Homestead exemption knocked off the value at all.

Tax feature Primary residence (homesteaded) Second home (non-homestead)
Homestead exemption Yes — reduces taxable value No exemption
Annual assessment cap 3% or CPI, whichever is lower 10% cap (non-school taxes only)
School-district portion of the bill Covered by the 3% cap Not capped — can rise with the market

Local insight: The 10% non-homestead cap doesn’t apply to school-district taxes, so the school portion of a second home’s bill can climb with the market every year (Palm Beach County Property Appraiser). And because you likely homestead your primary home in another state, there’s no Florida benefit to carry over — a very different position from a Floridian who’s downsizing and moving their Save Our Homes benefit along. Ask the county property appraiser to estimate your figure before you commit.

The Palm Beach County Property Appraiser confirms the 3% Save Our Homes cap applies only to homestead-exempt property, while a non-homestead property such as a second home is limited to a 10% annual assessment cap that “applies to all taxing authority millage rates except the school board millage” (Palm Beach County Property Appraiser, Assessment Caps, 2026).

What will insurance cost on a coastal second home?

Budget generously. Florida is one of the most expensive states in the country for homeowners insurance, averaging roughly $10,384 a year for $250,000 of dwelling coverage in 2026 (MoneyGeek) — and a coastal home can run higher. Then remember that flood coverage isn’t included in that number; it’s a separate policy on top.

Two coverage points matter most on the coast. First, wind: a standard Florida homeowners policy usually includes hurricane wind damage, but it comes with a separate, percentage-based hurricane deductible, and some high-risk coastal homes need wind coverage through a specialty or state-backed policy. Second, flood: the Insurance Information Institute is blunt that standard homeowners policies simply don’t cover it. Our guides to buying a hurricane-resilient home and the true cost of owning beachfront go deeper on both.

The second-home wrinkle most buyers miss: insurers treat a house that sits empty for months differently than one that’s lived in. A seasonal home may face extra conditions — a monitored alarm, an automatic water shut-off, or someone checking in periodically — because an unnoticed leak in an empty house can turn into a very large claim. Ask your agent how a vacancy or seasonal-occupancy clause reads before you sign.

The Insurance Information Institute states there is “no coverage for flooding in standard homeowners or renters policies,” and that flood coverage is available separately through the National Flood Insurance Program or private insurers. It notes flooding is the most common and costly natural disaster in the United States (Triple-I, 2026).

Can you rent it out when you’re not there?

Often yes — but within limits. A second-home loan lets you rent occasionally, yet Fannie Mae’s rules say the property can’t operate as a full-time rental or sit under a management company’s control (Fannie Mae). Rent too aggressively, and a lender can treat the home as an investment property instead.

Then there are the local rules. Florida law generally bars cities and counties from banning short-term rentals outright or dictating how often you can rent, but they can require registration, licensing, and inspections. The bigger constraint is usually closer to home: homeowners and condo associations sit outside that state preemption, and their governing documents can restrict or flatly prohibit short-term rentals — many condos set a 30-day or even 90-day minimum lease.

Local insight: The strictest rulebook usually isn’t the city’s — it’s your HOA or condo association’s. Before you count on rental income to offset carrying costs, read the association’s rental rules and minimum-lease terms line by line. A building that forbids leases under 90 days can quietly erase the vacation-rental plan you bought the place for.

Florida statute limits local governments from prohibiting short-term rentals or regulating their duration and frequency, but homeowners and condominium associations are not preempted — their governing documents can restrict or ban short-term rentals even where the city permits them (Florida Condo & HOA Law Blog, 2024).

The best Palm Beach County areas for a second home

The sweet spots share one trait: lock-and-leave ease. Waterfront condos, gated golf communities, and low-maintenance coastal homes let you fly in, settle in, and fly out with no yard waiting on you. With the county median near $538,000 in 2026 (Redfin), options stretch widely by town and building.

Contemporary white and gray luxury home with a large swimming pool under a bright blue sky, typical of a Palm Beach County golf community
Gated golf communities offer a different flavor of lock-and-leave — a pool, amenities, and an HOA that handles the grounds. Photo via Unsplash.

Three profiles cover most second-home buyers here:

  • Waterfront and beachfront condos — Singer Island, downtown West Palm Beach, the Jupiter waterfront, and the barrier-island towns. The building handles the exterior; you get a view and a boat slip instead of a lawn. See our waterfront homes buyer’s guide for the trade-offs.
  • Gated golf communities — Palm Beach Gardens leads here, with PGA National, BallenIsles, Mirasol, and Frenchman’s Reserve. Amenities, security, and single-story options make them a snowbird favorite.
  • Low-maintenance coastal homes — Jupiter, Juno Beach, and Tequesta, for buyers who want a house near the water without a sprawling estate to keep up.

Redfin reported a Palm Beach County median sale price of about $538,000 over the three months ending spring 2026, up 1.6% year over year, at roughly $313 per square foot. Prices vary sharply by community, building age, and proximity to the water (Redfin, 2026).

Budgeting the true cost before you buy

Add it all up before the view wins you over. On top of the purchase price, a Palm Beach County second home carries property tax with no Homestead break, some of the nation’s highest insurance premiums (MoneyGeek, 2026), HOA or condo dues, and a separate flood policy. Together, those line items can rival a second mortgage payment.

A quick carrying-cost checklist keeps the decision honest:

  • Mortgage principal and interest — at the higher second-home rate
  • Property tax on full market value, with no Homestead exemption or 3% cap
  • Homeowners insurance, plus a separate flood policy and hurricane deductible
  • HOA or condo dues, and any special assessments in the reserve study
  • Utilities, maintenance, and a property manager if you’re away for months

None of this is a reason not to buy — a well-chosen second home in Palm Beach County can appreciate and pay you back in winters on the water. It’s a reason to run the real number first. A local team can pressure-test the full monthly cost against your budget and your goals before you make an offer.

Frequently asked questions about buying a second home in Palm Beach County

How much down payment do you need for a second home in Palm Beach County?

At least 10%. Fannie Mae caps a second-home loan at 90% loan-to-value in its 2026 guidelines, so 10% down is the minimum, though many buyers put 20% to 25% down to reduce a higher rate. Investment properties usually require more. You also can’t use future rental income to qualify for a second-home loan.

Do you pay more property tax on a second home in Florida?

Effectively, yes. A second home isn’t your primary residence, so it doesn’t get the Homestead exemption or the 3% Save Our Homes cap — both require a permanent residence (Palm Beach County Property Appraiser). It’s taxed on full market value, protected only by a 10% non-homestead cap that doesn’t even apply to school-district taxes.

Are mortgage rates higher on a second home?

Usually. Since April 2022, Fannie Mae and Freddie Mac have added upfront fees of about 1.125% to 3.875% on second-home loans, scaled to your down payment (Fannie Mae). With 10% down that can lift your rate close to a percentage point above a primary-home loan. A larger down payment softens the hit.

Do you need flood insurance on a Palm Beach County second home?

Likely. Standard homeowners policies don’t cover flooding (Insurance Information Institute), so you’d add a separate National Flood Insurance Program or private policy — and lenders typically require it in mapped flood zones. Keep in mind Florida is one of the most expensive states for homeowners insurance, averaging about $10,384 a year for $250,000 of coverage in 2026 (MoneyGeek).

Can you rent out your second home when you’re not using it?

Occasionally, yes, but not as a full-time rental under a second-home loan (Fannie Mae). Florida generally lets cities require registration but not ban short-term rentals; the tighter limits usually come from the HOA or condo association, which can restrict or prohibit them entirely. Read the governing documents before you plan on rental income.

Is a condo or a single-family home a better second home?

It depends on how hands-off you want to be. Condos and golf communities offer true lock-and-leave living, with the association handling the exterior — ideal for seasonal owners. Single-family homes give you more privacy and space but more upkeep. Weigh the dues, the rental rules, and the reserve health before deciding.

Cibie Cahur leads The Cahur Group at Keller Williams Realty, serving buyers and sellers across Palm Beach County and Martin County, Florida. A Top 1% Keller Williams agent from 2017 through 2024, she works with an eight-agent team and serves clients in English, Spanish, and French. Reach her at 561-401-5758.

Thinking about a second home in Palm Beach County? Let’s map your financing, the real carrying costs, and the right communities before you make an offer — in English, Spanish, or French. Contact The Cahur Group or call 561-401-5758 to get started.

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