Florida Homestead Exemptions: The Basics For New Full-Time Residents
By Christopher Carter - Real Estate Broker Associate
December 13, 2023
Florida offers very generous benefits to property owners who make a house or condo here their Permanent Residence. Homestead advantages include significant Property Tax breaks, protection from Forced Sale and Spouse/Minor Child Occupancy Rights.
Because the Tax Savings and other benefits are so attractive, there are some strict qualifying and application rules involved, and that's part of what we are discussing today.
Toward the end of every calendar year, I send out a fresh version of this article to remind new Florida property owners about the advantages of applying for Homestead Exemptions...if they qualify.
Interestingly, the State of Florida refers to Homestead status being applied to a Permanent Residence. Mortgage Lenders, Insurance Companies, and the IRS all refer to a Primary Residence in their Occupancy Classifications. Florida's tighter qualifying standards go further because the benefits extended to fully qualified Property Owners are so significant.
I am NOT an Attorney. For interpretation and application to specific circumstances of anything you read in this article, you must speak with a Florida-licensed attorney.
Single Family Homes, Condos, Co-Ops, Manufactured Homes and Mobile Homes (if the land is owned) can be claimed as Homestead Properties. Within an incorporated town or city, up to 1/2 acre of the land on which the Homestead Residence sits is also protected. Outside an incorporated municipality the maximum land area that can be included with a Homestead Residence is 160 adjoining acres.
(Trivia question - Why 160 acres? Send me an email for the answer and explanation.)
All States' current Homestead Laws evolved from the original Federal Homestead Act of 1862 which promoted our country's expansion in the mid to late 1800’s. Today, raw land by itself cannot be identified as an owner's Homestead. A habitable structure (improvement) must be on it.
The Florida Homestead Exemption is NOT automatic. Property Owners seeking Homestead status must qualify and apply to the Property Appraiser's office in the County where the property is located. Counties assess property values, send bills, and receive tax payments because they provide services directly to property owners. The Florida Department of Revenue provides property tax oversight and guidance to all 67 Counties, though does not send bills or receive payments.
Before applying to the County Appraiser's Office for Homestead status and the Exemption, a property owner must first:
• Be a "natural person" (no Corporations, LLCs, or Partnerships, though specific types of Trusts are allowed)
• Establish and maintain Permanent Florida Residency, occupying the property before January 1 of the application year
• Not claim Homestead rights in any other State (includes the Spouse of a Florida Property Owner)
Required Documentation Of Permanent Residency Usually Includes:
• Proof of Ownership (Recorded Deed, Property Tax Receipt)
• Florida Driver’s License
• Social Security Numbers for Owner and Spouse
• Vehicle Registration and License Plate Number
• Voter's Registration Card
(All documents must show the same address that is on the Homestead Application)
Additional supporting documents may also be requested:
• Bank Statements and Tax Returns showing the Florida Address
• Utility Payments
• Proof that Former Permanent Residency (and Homestead Status) in another State has ended
• Employer Name and Address
Each County sets its own qualifying standards for Homestead Status and may request other evidence that the applicant is a true Permanent Resident of Florida. Since they will be "losing" potential Property Tax Revenue by extending Homestead Exemption Reductions, Counties want to make sure applicants are properly qualified to receive the tax discount. Homestead applications must be made in person at a local County Appraiser office.
Important - Filing for the Exemption can be made until March 1st of the Application Year, though Proof of Ownership and Residency must be dated before the beginning of that year. The property must have been Legally Owned for some part of the Previous Calendar Year.
This means that Homestead Status and Tax Benefits can never be received for the same Calendar Year in which a Property is Purchased. For new Owners/Applicants, the most recent year's Adjusted/Updated Assessed Value is applied before applying the Homestead Exemption.
Annual Verification is sent to Property Owners by County Appraiser Offices, and includes a statement confirming that the property is still being occupied as the Owner's Permanent Residence.
Let's look at some general provisions of Florida's Homestead Exemption:
• $25,000 Exemption from Assessed Value for all Property Taxes
• Another $25,000 Exemption is applied to the Assessed Value over $50,000 - only applies to Non-School District Taxes
• Additional exemptions are available to Owners 65 and older, Widow(er)s, Disabled Military Veterans, and Non-Veteran Owners who have specific Disabilities
• Contact your local County Property Appraiser's Office with any questions about Property Taxes. Links to Florida Department of Revenue Taxpayer Information Resources are further down in this article, along with the First-Time Application for Homestead Status by new Homeowners.
Forced Sale From Civil Lawsuit And Judgment
• Attorneys tell us that an owner cannot be forced to sell a Homestead Property in order to satisfy a Legal Judgment in a Suit brought by a Creditor or Civil Plaintiff.
• The entire Value of a Legitimate Homestead Property is protected by Florida Statute. As long as a Property and its Owner Legally Qualify for and continue the Homestead Exemption, the Property is protected from most forced sales, no matter how much it is worth.
• Contact a Florida-licensed Attorney with all questions about Legal Protection related to a Homestead Property.
Real Estate Attorneys emphasize that Florida's Homestead Exemption does NOT protect a Property Owner from Lawsuits and Judgments related to: Federal Income Tax Liens, County Property Tax Liens, Mortgage Foreclosure, Condo Association and HOA Foreclosures for not paying scheduled or Special Assessments and Contractor Liens for work performed on the property.
Spouse And Minor Child Rights
• According to Family Law Attorneys, 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 if it was purchased with only one Spouse's Money.
• In most cases, Homestead Property may not be willed to another person upon the Owner's Death as long as there is a surviving Spouse and/or Minor Children. Attorneys go on to say that a Spouse may Waive these Rights, though without a Waiver a Spouse's Homestead Rights are held in place over the Will.
• Speak with a Florida-licensed Attorney about Spouse/Minor Child Occupancy Rights and Inheritance considerations regarding Homestead Properties.
There is one more VERY attractive benefit attached to establishing Homestead Status for Florida Property. It's called the Save Our Homes (SOH) Assessment Limitation, which caps the Annual Increase to the Property's Assessed Value. This begins with the Assessed Value at the time Homestead Status was granted, and continues each year thereafter. Any Annual Increase in a Homestead Property's Assessed Value is capped at 3% or the Published Consumer Price Index (CPI) whichever is less.
This is NOT a limit on the Tax Amount Increase, it is a cap on the increase of each year's Assessed Value, meaning the property's Assessed Value can only go up by a maximum of 3% each Calendar Year of Ownership.
The SOH Limitation alone saves Property Owners a considerable amount of money each year after they establish Homestead Status!
For background and explanation on Florida Property Taxes, check out my article from earlier this month: Florida Property Taxes - a quick introduction for new owners: https://thefloridarealestateblog.com/f/florida-property-taxes---a-quick-introduction-for-new-owners
There we are, a brief introduction to Florida's VERY generous Homestead Benefits for Owners who choose to make a Florida Property their Permanent Residence. Because the benefits afford such desirable protections and Tax Savings, the qualifying standards are justifiably strict.
There are serious Penalties for Owners who commit Fraud when applying or who Violate the Requirements after being granted Homestead Status. For example, Owners who Rent out Homestead Property to others for too long or too frequently can be considered to have "abandoned" their Homestead Protection.
On top of losing all the benefits, Owners fraudulently claiming Homestead Status can be charged Back Taxes (going back 10 years), Penalties (50%), and Interest (15% Annually). Check with your County Appraiser's Office for details.
Here are some links to Florida Department of Revenue Homestead information resources.
Homestead Exemption Overview: https://floridarevenue.com/property/Documents/pt113.pdf
Property Tax Information For First-Time Florida Homebuyers: https://floridarevenue.com/property/Documents/pt107.pdf
Save Our Homes Assessment Limitation: https://floridarevenue.com/property/Documents/pt112.pdf
Property Tax Oversight Infographic: https://floridarevenue.com/property/Documents/ptoinfographic.pdf
Original Application For Homestead: https://floridarevenue.com/property/Documents/dr501.pdf
Feel free to forward this article - especially to anyone who bought a Florida house or condo this past year, or who will soon be making the transition from Seasonal to Full-Time Residency. Our Homestead Exemption is an extremely attractive perk to owning Florida Property and making it your Permanent Residence.
Editor's Note: Christopher Carter is NOT an attorney. He does not give legal advice. For interpretation and application to specific circumstances of anything you read in this article, you must speak with a Florida-Licensed attorney.