Florida's Homestead Laws give residents a tax break, legal protection, and much more...

This is a great reason to get in touch with all your buyers from last year and be sure they know about Florida's Homestead Exemption. They have until March 1 to file and receive the property tax break for all of 2016. If they had homestead status on a previous home, they'll need to establish their new one as homestead.

Sending a reminder now is a great way to follow up and maybe get a new referral or two. Even when they were Second Home or Investment buyers, they'll appreciate knowing about this. Feel free to forward the newsletter if you'd like.

Florida's Constitution and Statutes extend 3 different types of protection under Homestead Laws :

- Partial exemption from property taxes

- Protection from forced sale, preserving full value
- Safeguards for surviving spouse and/or minor children

Another related protection applies to the year-to-year increase in the assessed value of the homestead property, which is limited to the lesser of 3% or the annual change in the Consumer Price Index. Called the Save Our Homes assessment limitation, it's a cap on the assessed value's increase, not on the tax bill itself.

The Homestead Exemption applies to those who make

a Florida property their permanent primary residence.

All states' current Homestead laws are directly related to the original Federal Homestead Act of 1862 which promoted our country's expansion in the mid to late 1800s.

Florida offers some of the broadest and most generous

protection compared to homestead laws of other states. The main reason is that there is NO limit to the value of property that can be identified as a resident's permanent homestead.

Single family homes, condos, manufactured homes, and mobile homes can be claimed as homestead properties. Within a town or city (incorporated municipality), up to 1/2 acre of the land on which the homestead residence sits is also protected. Outside a municipality the maximum land area is 160 adjoining acres.

You may remember that 160 acres is a quarter-section (a Section is 640 acres) as measured by the Public Land Survey System, created in 1785 to identify and measure land outside the 13 original colonies.

Florida uses this system of Meridians, Baselines, Sections and Townships for land outside municipalities and subdivisions.

Today, raw land cannot be identified as one's homestead. A habitable structure must be on the land.

Owners may give up one homestead and establish another by making proper application. Contact the FL Department of Revenue for details.

Homestead Exemption for property taxes is NOT automatic.

Property owners seeking the partial tax break must qualify and apply to the Property Appraiser's Office in the county where the property is located.

Although NOT required, some Florida residents seeking to protect their property from legal judgment also file a notarized Declaration of Domicile with the Clerk of the Court in the county where their homestead property is located.

Doing this provides documented proof of a property owner's intent to establish primary Florida residency and receive asset protection benefits under Florida's Homestead Laws.

Before applying to the Appraiser's Office or filing a Declaration of Domicile, a property owner must first :

- Be a "natural person" (no LLCs, corporations, partnerships)
- Establish and maintain permanent Florida primary residency
- Not claim homestead rights in any other state

The qualifying criteria are very similar to lenders' standards when determining primary residence vs second home occupancy which we have discussed in previous newsletters.

Required documentation can vary between counties -

The local Appraiser's Office may consider any combination of the following :

  -   Proof of ownership (deed, tax receipt)
  -   Florida Drivers license
  -   Florida vehicle registration
  -   Employer's address
  -   Bank statement and tax return mailing address
  -   Proof that former primary residency (outside FL) has ended
  -   Utility payments at homestead address
  -   Voter registration
  -   Schools attended by dependent children

Click the Florida Department of Revenue logo to the right for a copy of the Homestead Application form.

Filing for the exemption can be made up to March 1, though proof of residency must be dated before January 1st in order to receive the tax break for the upcoming year.

Annual renewal is sent to property owners by the Appraiser's Office, and includes an affirmation that the property is still being used as the owner's permanent / primary residence.

Let's look at some of the general provisions of Florida's Homestead Exemption -

Property Taxes :

- $25,000 exemption from assessed value for all property

          taxes

       - Additional $25,000 exemption applied to the assessed

value over $50,000 - only applies to non-school taxes

- Local exemptions may also be available to owners 65

and older, widow(er)s, blind, and disabled residents

Forced Sale from Civil Lawsuit and Judgement :

- A person cannot be forced to sell a homestead property in

order to satisfy a legal judgement in a suit brought by a

creditor or civil plaintiff.

- The value of a homestead property is unrestricted by

Florida Statute. As long as a property and its owner legally

qualify for and continue the Homestead Exemption, the

property is protected from forced sale, no matter how

much it is worth.

- Florida's homestead asset protection laws do NOT protect

an owner from :

             - Federal income or property tax liens
             - mortgage foreclosure
             - HOA liens
             - mechanics liens for work performed on the property

Spousal Rights :

- The owner of a homestead-protected property may not

sell or otherwise convey the property without her/his

spouse's approval. This applies even if the property is in

only one of their names or it was purchased with only

one spouse's money.

- Homestead property may not be conveyed by will to

another person upon the owner's death as long as there

is a surviving spouse and/or minor children. A spouse

may waive these rights, though without a waiver the

spouse's homestead rights are held in place over the will.
(An ex-spouse is not the same as a spouse.)

When property owners have questions about the Homestead Exemption for tax purposes, they should contact their County Appraiser's Office.

When they have questions about asset protection and spousal rights under Florida's Homestead Laws, they should consult a licensed attorney.

Well, there we are - a brief overview of Florida's generous Homestead Exemption for permanent residents.

Just another reason for people to consider buying in our state...as if the weather, beaches, fishing, palm trees, golf, sunsets, and no state income tax weren't enough.

Knowing their available options and benefits will help them be much more comfortable with the home buying process.

Well-informed buyers help make our trip to the closing table so much smoother.