The Florida Homestead Exemption is a very powerful tool used to reduce the tax impact on Florida homeowners. Homestead in Florida is protected more than anywhere else in the U.S.
Homeowners should know how to properly qualify for the exemption, to avoid disappointment or confusion.
It’s important to note that although similar, Florida Homestead Exemption Law (tax) is not the same as the Florida Homestead Law (creditors and judgments). We cover both below:
What is Florida Homestead Exemption Law (Tax)?
Florida’s Homestead Exemption Law (Tax) is covered in Statute 196.031.
- The Florida Homestead Exemption law is a property tax break.
- It reduces the assessed value of a home by up to $50,000 and limits annual property tax assessment increases.
- $25,000 applies to all property taxes (including school district taxes and additional exemptions of up to $25,000 applying to the assessed value of between $50,000 and $75,000 and only to non-school taxes).
- This law is different from the constitutional protection from creditors (explained below) and it requires an initial filing within the property’s county.
- Property owners must reside in the home from January 1 of the calendar year to qualify for the Florida Homestead Exemption.
- It caps the increase in assessed value of the homestead equal to 3%, or the annual Consumer Price Index (CPI) – whichever is lowest.
- This cap is known as the ‘Save Our Homes’ benefit.
How to Qualify for the Florida Homestead Exemption Law (Tax)?
To be eligible for the Florida Homestead Exemption Law, you must have proof that:
- You are the property owner.
- You must have the property as your primary residence.
- Lived at the property from January 1st of the year you want the exemption to apply.
- Cannot have rented the property out for more than 30 calendar days in the year.
What is Florida Homestead Law (Creditors and Judgments)?
The Florida Homestead Law protects a Florida resident’s primary home from creditor judgments. This is a Florida constitutional law.
If you, as a homeowner, have a recorded judgment against you, the judgment cannot attach or become a lien on your home. That means a creditor cannot take your home away from you – regardless of how much money you owe.
What Liens Aren’t Exceptions to the Homestead Law (Creditos and Judgements)?
Some liens and judgments are exempt from the Homestead Law:
- State and property taxes
- IRS Tax liens
- Mechanics liens on the property to build or repair your homestead
- Liens recorded before you acquired your homestead, due to special assessments or homeowner association dues
- Liens that were given to purchase the property (such as a mortgage or home equity loan)
- Property acquired through fraud or a crime
What is Homestead Property in Florida?
Florida homestead is a property that is a person’s primary residence in Florida. It must not exceed one-half acre of contiguous land in a municipality or 160 acres in an unincorporated county.
All contiguous property is included in a homestead, even if that property has a separate legal description and tax number.
There is no restriction on the physical size or value of the property. But a homestead that exceeds the above-mentioned size limitations will be allocated a pro-rate to the total property value.
What Makes a Property a Primary Residence?
Florida Homestead protection applies when a person has the intent to hold the property as their primary permanent residence.
There is no duration for this to apply; a property can become a primary residence immediately after moving in.
You can only have one permanent homestead. So, if you live in another state or country you can’t qualify for Homestead protection in Florida.
However, you can retain a second or another residence in another state, as long as your Florida home is the primary, permanent home.
Homestead laws can cover all manner of real estate including single-family homes, condominiums, co-ops and stationary houseboats. Long-term leases may also qualify, providing the property constitutes as the debtor’s primary residence.
A common way of proving the intent of primary residence is to record a Declaration of Domicile with the clerk of the court.
Does Florida Homestead Exemption Law Work If My House is in a Trust?
Florida Homestead Exemption law can still apply if your home is owned by a trust. You’ll need to show the normal documentation and a certificate of the trust or some trust documentation. Depending on your county, you may have to provide the entire trust agreement document.
The trust must explicitly provide the exemption applicant exclusive right to live in the homestead for life. If not, the county will likely deny your exemption.
We advise you to contact our Florida real estate lawyers if your house is in a trust in Florida and you want to take advantage of Homestead Exemption Laws.
What Happens to a Florida Homestead after Death?
After the owner dies, Homestead protection still continues. The homestead is not included in probate and cannot be liquidated to pay outstanding debts.
If heirs or trustees decide to sell the homestead after the owner’s death, then the proceeds of the sale pass to the decedent’s heirs and trust beneficiaries.
Hire a Real Estate Attorney in Pinellas County and Hillsborough County
If you’re buying a property in Florida and need any legal assistance, then our Florida real estate lawyers can help.
We can help ensure your home qualifies for the Homestead Law benefits while completing the closing process in a way that protects your rights, finances and interests.
Our St Petersburg & Riverview real estate attorneys have extensive experience that can help you through these tricky moments, reviewing your real estate contract, advising you on the next steps to secure your transaction, and successfully finalizing the purchase of your new home or commercial property.
Contact us today to schedule a free consultation