This is Part One in our Four-Part series discussing what is Florida Homestead, which includes few different areas of discussion where Florida’s Homestead rights are key in determining the outcome of a decision in the area of Estate Planning and Real Estate.
Florida’s Homestead laws provide a bundle of rights which apply in a few different areas. The first area we will be discussing is the Homestead Exemption to property taxes.
The Homestead Exemption – What is it and where does it come from?
The Florida homestead exemption reduces the taxable value of your home by as much as $50,000. In other words, depending on the applicable exemption, you are not taxed on the exempt portion of your property’s assessed value.
The Florida homestead exemption is found under Article VII, Section 6, of the Florida Constitution, and is codified under Florida States Chapter 196.
Although most property owner’s in Florida know that a homestead exemption exists, more often than not the Florida’s homestead exemption is misunderstood. I’ll do my best to keep the article brief, however some things cannot be understood without deeper explanation.
Brief History on Florida Homestead
In response to Florida Residents’ inability to pay their real estate taxes during the Great Depression, the Florida Legislature proposed a property tax exemption on the first $5,000 of a homeowner’s residence, which would be equal to about $97,000 today. This proposed legislation was overwhelmingly approved.
By the 1960s, Florida had increased the exemption to $10,000. Later in the 1908s, the Florida Homestead exemption was increased to $25,000, where it remained the same until the 1990s.
In 1994, the Save Our Homes amendment was passed, which established a cap on the annual increased allowable on the taxable value of homestead properties to the lesser of either three percent, or the increase in the Consumer Price Index.
In 2008, Florida voters approved a constitutional amendment which increased the homestead exemption to $50,000, and also placed a new 10% cap on non-homestead real property and created the concept of portability, which is the right to move the Save Our Homes benefit with you as you change homesteads.
Requirements for Homestead
The requirements to be eligible for the homestead property tax exemption are (1) hold legal or equitable title to real estate in Florida and (2) the property must be the permanent residence of the owner or another legally or naturally dependent of the owner. Further, only one exemption is allowed per individual or family unit. The property may be held as tenants in common, joint tenants, or tenants by the entirety. Click here for a better understanding on tenants in common versus joint tenants.
One important note: if a person is receiving the benefit of an ad valorem tax exemption (or tax credit) in another state where permanent residency is required as a basis for that exemption in that state, then the person is not entitled to the Florida homestead tax exemption.
Make sure you file for exemption!
The Florida homestead tax exemption is not automatic. In order to receive the homestead tax exemption, the property owner must file for the exemption. Applications must be made between January 1 and March 1 of the tax year to the appropriate property appraiser’s office. Failure to file the application by March 1 of the tax year shall constitute a waiver of the exemption privilege for that year.
As you can surely see, there are many moving parts to navigating Florida’s Homestead laws. If you are interested in finding out more about Homestead laws and their application to your situation or circumstances contact our office to schedule an appointment and have one of our attorneys review your matter.
Click here for Part 2 in the Homestead Series!
If you are reading this post because you having issues relating to any of the above, contact our office at 305.224.8900 for a free consultation and let one of our attorneys review the matter at hand in order to protect your property rights.
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