Florida, known for its sultry beaches, signature Rum Runner cocktail (founded in the Holiday Isle Tiki Bar in Islamorada), and thriving python population, offers its residents another unique advantage. This is known as the Homestead Exemption – an invaluable benefit that significantly impacts homeowners. Enshrined in the state’s constitution, the Homestead Exemption serves as a financial lifeline for Florida residents, promoting homeownership, property tax reductions, widow, and veteran benefits, and even creditor protection. But to get approved for this fantastic benefit, you HAVE TO FILE YOUR APPLICATION BY MARCH 1st.
For those of you with a proclivity towards historical significance, “homestead” is a noun stemming from Old English meaning “a lot of land adequate for the maintenance of a family” (1690s). Homesteading in America began in 1862 with the Homestead Act, which granted 160 acres of public land to any person who would live on and cultivate the land for at least five years. The term “homestead” then came to refer to the dwelling or house built on the land. The term has now evolved to mean “another great reason to move to Florida.”
You are probably wondering how this information affects you? Do not worry, we have got you covered. Below are the answers to all your questions about owning a homestead in Florida:
Specifically, What Benefits Come From Florida’s Homestead Exemption?
- The Homestead Exemption is a valuable property tax benefit that can save homeowners up to $50,000 on the taxable value of their home. This is called the ad valorem real property tax exemption. Suppose, for instance, that your county’s property appraiser assesses your property at $500,000. With the $50,000 exemption, the taxable value of your property would decrease to $450,000, resulting in annual savings of approximately $1,000.
- There is an additional benefit which limits the annual increase of the assessed value to 3% or the Consumer Price Index, whichever is less. For instance, if your $500,000 property appreciates by $100,000 in a year, the county property appraiser would only be permitted to raise your home’s assessed value by a maximum of 3% (or even less if the change in the CPI is below 3%). In practical terms, this means that as your Homestead’s value appreciates over time, your property taxes will not significantly increase. This shields homeowners from unpredictable spikes in housing costs, providing peace of mind and predictability in budgeting.
- Creditor Protection: Many people do not know that Florida homestead has unlimited creditor protection against the vast majority of creditors. For example, if you are in a car accident and get sued, the creditor will not be able to come after your Florida homestead since it will be completely creditor protected. The same applies to credit card debt. The homestead, however, is not protected against every creditor. The Florida constitution provides three exceptions where a creditor can successfully come after a Florida homestead:
- Taxes or assessments;
- Mortgages; or
- Improvement or repairs performed on the homestead.
Do I Qualify for Florida’s Homestead Exemption?
All legal Florida residents are eligible for a Homestead Exemption on their homes, condominiums, co-op apartments, and certain mobile home lots if they qualify. A person can own a homestead property as an individual, jointly with someone else, or as a married couple (by the entireties). To qualify, a few rules apply:
- The property you want to claim the exemption for must be your permanent residence.
- The property must be owned by you, as a natural person (an LLC or corporation that owns the property cannot qualify for homestead exemption).
- You must have lived at the property on January 1 of the tax year in question. (for example, if you wish to claim the homestead exemption on your 2024 taxes, you must have lived at the property in question on January 1, 2024).
- The property may not have been rented for more than 30 days in a given calendar year. (Renting the property for more than 30 days for two consecutive years or more than six months is considered an abandonment of the Florida homestead exemption.)
- You must submit your application by March 1, 2024 (or March 1st of any calendar year you wish to apply).
- Such application is called a DR-501form that must be submitted to your county property appraiser and demonstrate proof of residency. Applications can be completed online, by mail, or in person at your local country property appraiser’s office.
Specifically, What Proof of Residency Must I provide?
Whether you complete the form online or in person, you will be asked to provide proof of your residence at the address you want to claim the exemption for. Each country differs in required documentation, but a few examples of documents that might be needed include the following:
- Florida driver’s license or state Identification Card
- Florida vehicle registration number
- Florida vehicle license plate number
- A Florida voter’s ID card
- Immigration documents, if you are re not a U.S. citizen
- Proof of previous residency in a place other than Florida, plus proof that that residency has ended
- Evidence that you have given up a driver’s license from another state
- The name of your current employer
- School addresses of any dependent children you have
- A bank statement, plus a mailing address for a checking account
- Proof of payment of utilities at the homestead address
- Address listed on your last IRS income tax return
- Your Social Security number and your spouses
Some Surprising Facts About Homestead as a Cliffhanger:
What if the property is in trust?
This is generally allowed. It is necessary for the applicant to provide the Property Appraiser’s Office with a copy of the complete trust agreement. Florida law requires that the homestead applicant have legal title or beneficial title to the property, which we can only establish by reviewing the trust agreement if the property is in a trust.
What is portability? How do I receive the Portability benefit?
If you had homestead on another property somewhere in Florida within the last three years, and you are applying for homestead on your new property you recently purchased, you may be able to bring your “Save Our Homes” assessment savings accumulated on your previous property (also known as your Portability amount) with you to the new property. Portability is not automatic; you must apply for it. To apply, you will need to complete form DR-501T and submit it with your new Homestead exemption application, or follow the instructions for Portability during the online application process. Remember, it is a separate application which must be filed in addition to the Homestead application and if you do not request Portability when applying for your new Homestead exemption, you may lose the savings accumulated on your former homestead.
Can I get Homestead Exemption on a Mobile Home?
Yes, you may qualify for a homestead exemption on your mobile home if you own both the land and the mobile home. When applying, you must provide the title or registration to the mobile home and other required documentation.
Are There any Size Limitations for my Land?
The protection of the Florida Homestead Law has a limitation regarding the lot size of your principal place of residence in Florida. Specifically, homestead protection includes residences within a municipality up to one-half acre and residences outside of a municipality up to a contiguous 160 acres.
Do I Need to Live in My Florida Homestead Year-Round to Qualify for Florida Homestead?
The answer is no, you do not need to live year-round in your Florida home for it to be considered your homestead. The standard is that your absence must be temporary, and you have an intent to return home to your Florida homestead. Tip: You can file a declaration of domicile form with your local county’s recorder’s office that will help show your intent to make your Florida home your homestead. The declaration of domicile form will usually be available for free on your county clerk’s website.
There you have it. Another slew of great reasons to make Florida your primary residence. Aside from the Homestead Exemption, there are many other laws specific to Florida that only an attorney can explain correctly. Our exclusive focus lies in estate planning, protecting your assets, and ensuring you peace of mind regarding the welfare of your family. Contact OC Estate and Elder Law at (954) 251-0332 or info@ocestatelawyers.com to get started with your free consultation. Our attorneys are fluent in English, Spanish and Russian.
