Part I - What Are The Benefits Of Florida Homestead?


Part I - What Are The Benefits Of Florida Homestead?

This is the first part of a two-part series exploring Florida Homestead. Be sure to tune in next week for part two of the series which will cover frequently asked questions regarding the Florida Homestead Exemption.

What Is a Florida Homestead Property?

The Florida Constitution allows for special benefits to be conferred to properties that qualify as homesteads. A homestead property must meet three requirements:

1)      Residency Requirement: Only Florida residents can claim to own a homestead property.

2)     Acreage Requirement: If a residence is within a municipality, only one-half acre is protected as a homestead. Any additional property, buildings, or structures will not be protected as part of the homestead. If the residence is located outside of a municipality, properties up to 160 acres qualify. Other buildings and structures, even those used for business purposes, will be permitted under the homestead protections.

3)     Natural Person Requirement: The property must be owned by a human, rather than a corporation or LLC, to be eligible as a homestead.

Houses, condominiums, co-ops, apartments, mobile homes, and houseboats can all qualify as homestead properties, as long as the Florida resident can show that the property is his or her primary and permanent residence.

There are three key elements to a Florida homestead property. These are asset protection, family preservation, and tax exemption.

Asset Protection

When a property qualifies as a homestead, Florida laws provide certain protections to prevent Florida homeowners from having their homes sold to pay creditors. This asset protection benefit is not tied to any particular value -- even a multi-million-dollar home is protected from creditors if it qualifies as a Florida homestead property. This protection also extends to the estate of the homeowner, so the homestead property is protected from creditors even after the owner’s death.

Family Preservation

In order to preserve a family’s assets, the Florida Constitution places restrictions on the homeowner’s ability to transfer a homestead property. If the owner is married, even if the spouse is not on the deed, he or she may not transfer a Florida homestead property without the permission of the spouse. There is only one exception to this rule, and that is if the homeowner is changing the deed to add the spouse as a co-owner as a tenancy by the entirety. In that circumstance, the spouse’s signature is not required.  If a homeowner dies while married, the homestead property must pass to the surviving spouse, but more about homestead properties and probate/estate planning below.

Tax Exemption

The most well-known benefit of the Florida homestead property is the Homestead Tax Exemption. Details about what the tax exemption entails, who is qualified to receive it, and how it works are provided below.

What Is the Florida Homestead Exemption?

The Florida Homestead Exemption is a tax reduction permitted on the property taxes assessed on owner-occupied residences. Each Florida resident is entitled to take one Homestead Exemption on their primary residence, as long as the property meets certain restrictions.

The tax exemption is based on the value of the home and can add up to a $50,000 reduction in the value of the home, which is used to assess property taxes each year.

The tax exemption allows for the first $25,000 of the assessed value of a property to be disregarded. If the property is worth more than $50,000, then the net $25,000 can also be disregarded, although the additional reduction will not include school district taxes.

For example, if a homestead property has a value of $45,000, then the county will exempt the first $25,000 and only assess taxes against the $20,000 remaining value. If the property is worth $75,000, the county will exempt the first $25,000, tax the second $25,000, and exempt the third $25,000, therefore, leaving the taxable value at (and assessing tax on) $25,000. However, on the third $25,000 exempted, the county will not reduce school district taxes owed.

What Is Save Our Homes (SOH)?

After the first year that a resident qualifies for the Homestead Exemption, the State of Florida has put protections in place to restrict a sudden increase in property taxes. Once a property is assessed and approved as homestead property, Save Our Homes states that the assessed value of that home cannot increase by more than 3 percent or the percentage change in the Consumer Price Index (whichever is lower). This cap and tax benefit can be incredibly valuable in areas of Florida where property values are increasing rapidly.

Save Our Homes does not apply to improvements or additions made on the property. After the property value is assessed and restricted based on Save Our Homes, the value of any improvements will be added to the taxable value.

Ask an Experienced Pinellas County Real Estate Attorney for Assistance

If you are a Florida resident who would like to learn more about the Florida Homestead property laws and benefits, contact Kira Doyle Law in St. Petersburg, FL, at 727-537-6818, to schedule an appointment with one of our experienced real estate attorneys today!


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