Part II - Frequently Asked Questions: A Deep Dive Into The Florida Homestead Exemption

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Last week, we posted a blog article taking a look at Florida Homestead. If you haven’t read that article yet, make sure to look at it first before taking our deep dive into the details about the Florida Homestead Exemption and how it may impact your family.

1. How do I qualify for the Florida Homestead Tax Exemption?

All Florida residents are eligible for the Homestead Exemption, as long as the property and resident meet the residency, acreage, and natural person requirements. To qualify, however, applicants must be able to prove

  1. That they are Florida residents, and

  2. That they occupied the property as a permanent residence on January 1 of the year the exemption is claimed.

In order to meet the application deadline, residents must apply by March 1 of the year for which the exemption is claimed. Applications can be completed in person, via physical mail, or online. Supporting evidence must be provided for the homeowner requesting the exemption and his or her spouse, if married, even if the spouse is not an owner of the property.

First, Florida residents must provide evidence that they have a beneficial interest or ownership of the property. Permissible evidence to this effect includes:

  • A copy of the recorded deed,

  • A tax bill,

  • Notice of Proposed Property Taxes,

  • A copy of the proprietary lease to a co-op, a trust agreement, or a will showing beneficial interest.

Next, an applicant must show that he or she is a permanent Florida resident, using:

  • A valid Florida driver’s license or ID, showing the permanent residence address, and either

  • One of the following:

  • Florida vehicle registration,

  • Proof of Florida voter registration, showing the permanent residence address, or

  • An affidavit of domicile recorded in the public records in the county in which the exemption is sought;

OR

  • Two of the following:

  • Employment verification, W-2 or paystub showing the permanent residence address,

  • Evidence of the location where the applicant’s dependent children are registered for school,

  • Federal income tax returns, showing the permanent residence address, or

  • Proof of payment of utilities or bank statements mailed to the address of permanent residence.

Then, applicants must show that they no longer are receiving the exemption on a previous residence. To do so, if the previous residence is still owned by the applicant, proof of cancellation of exemption at the previous residence will be required. If the previous residence is no longer owned by the applicant, proof of the date of sale will be required.

Finally, all applicants are also required to provide their Social Security Numbers, and married applicants will have to provide their spouse’s Social Security Number (even if the spouse is not named on the deed). Permanent Resident Aliens will be required to show their Alien Registration Card (Green Card).

2. How are property taxes assessed?

In each county in Florida, appraisers assess the value of real property three ways. First, the property’s “just value” is determined. This is the total value of the property as of January 1 of each year. Next, the “assessed value” is calculated by restricting the increased value from the year before under the Save Our Homes cap (the 3% maximum increase, explained in Part I of this blog series). Finally, the Homestead Exemption is applied (and any other property tax exemptions for which the homeowner may qualify), leaving the total “taxable value” of the property. Using this taxable value, the tax collector can calculate the property taxes due. In August, residents will receive annual Notices of Proposed Property Taxes. The tax bill arrives to residents in October or November, and then property taxes are due by the following March 31.

3. What happens to my exemption if I move?

It is possible to transfer a Homestead Exemption and preserve the Save Our Homes cap if a resident moves from one Florida home to another. To keep these benefits, a Florida resident must establish a new Florida homestead property within two years of January 1 of the year in which he or she left the previous property. The new homestead application must be submitted by March 1.

4. What happens to the exemption if I sell my house?

When a home is transferred to a new owner, the Homestead Exemption and Save Our Homes does not stay with the property. On January 1 of the year following the sale, the property’s “just value” will be reassessed at the fair market value. The new owner may apply for the Homestead Exemption if he or she qualifies, and the Save Our Homes cap will begin again at the new value.

5. How could I lose my exemption?

There are a number of ways to lose eligibility for the Homestead Exemption. If any of the following changes occur, Florida residents are responsible for updating their status with the county. Residents may lose part or all of their Homestead Exemption if they:

  1. Rent out part of the home (this usually results in a prorated exemption for the part of the home still owner-occupied),

  2. Rent out the whole home (this will not qualify for the Homestead Exemption),

  3. Receive income from part of the property (if a portion of the property is used to bring in income, that portion of the property may not be eligible for the Homestead Exemption),

  4. Refinance (unless there are changes to the title, refinancing should not affect the Homestead Exemption), or

  5. Change the title to the home.

  6. What happens to my exemption when I die?

When a Florida resident passes away, his or her Homestead Exemption may be inherited by heirs for the remainder of that year. However, the inherited Exemption will only apply until the following January 1. Prior to that date, the new owner should have filed a new application for the Homestead Exemption. If the property is not inherited by a Florida resident who will be using the property as his or her primary and permanent residence, then the new owners have an obligation to notify the county so that the Homestead Exemption can be cancelled.

One of the protections inherent in the homestead property is familial protection. This ensures that a homeowner’s family will not be disinherited of the family home. If a Florida homeowner is married or has minor children at the time of his or her death, the State of Florida requires that the homestead property pass either to the spouse or the minor children. If the homeowner is married but has no minor children, the property must pass to the surviving spouse.

If the homeowner attempts to transfer a homestead property to someone other than a spouse or minor children (whether in a trust or in a will), the courts will intervene and pass the property to the surviving spouse and descendants. If there are both a surviving spouse and direct descendants, the courts will give the spouse a life estate and the descendants will receive the remainder interest in the property.

6. What happens to my homestead exemption if I place my property in a living trust?

As mentioned above, the Florida Homestead Exemption only applies to property owned by a “natural person.” Although this matter has not yet been settled by the Florida Supreme Court, Appellate Courts tend to treat a revocable living trust as the alter-ego of the trustmaker. So long as the individual who owns the property and creates the living trust continues to live in the property after placing it in a trust, homestead protections (including Save Our Homes) should remain.

The trust, just like if the property was devised in a will, must transfer the homestead property to a surviving spouse or minor child, if any exist. If the trust instructions do not conform to the Florida homestead family preservation requirements, the transfer will be considered invalid.

Unlike a revocable trust, which can be altered during the homeowner’s lifetime, an irrevocable trust is not treated as a “natural person,” and a property placed in an irrevocable trust will not be considered eligible for Florida homestead protections.

Ask a 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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