The Florida Homestead Exemption
When someone purchases property or real estate in Florida, they are usually given the opportunity to apply for what the law calls a homestead exemption. Florida’s tax laws are extremely favorable to homeowners, and the state’s homestead exemption is a status which allows you to escape some of what might be a heavy tax burden in another state without the exemption. However, understanding the exemption can be difficult, and enlisting an attorney to help answer any questions can be very helpful.
A Relatively Simple Process
Florida’s law states that if a person has legal title to a piece of property in the state, and if they “in good faith” made that property their permanent residence on or before January 1 of that year, the property is exempt from all taxes (except for what the state calls ‘assessments for special benefits’) up to $25,000. If your home is valued higher, you can exempt up to $50,000 worth, but the home must be properly appraised before applying the exemptions. Questions about whether you are eligible for the exemption is usually something that can be clarified by your certified public accountant (CPA) or other tax preparer, if you need to make certain.
If you are eligible, the actual process of obtaining the exemption can be relatively straightforward as long as you have the documents that can prove your residence in Florida on the appropriate dates. Once you have received the exemption, you do not have to reapply each year; however, this does mean that if you stop being eligible for the exemption, the onus is on you to inform the state of it, lest you face serious financial penalties if you are found out.
Other Advantages To Homestead Exemptions
In addition to the tax benefits one receives if your property is considered exempt, there are other positives associated with going through the process. Florida law is decidedly anti-tax, where possible, and much of those benefits are directly tied to owning a home in the state, or assets within that home. Some examples include inheritability, in some cases – for example, the surviving spouse of a deceased veteran may inherit the home’s exemption, provided they present the appropriate documentation.
Other protections include restricting the right of one spouse to transfer exempt property (so as to prevent the other spouse being automatically disinherited), and protecting asset value in the home to an almost unlimited degree. Florida’s courts will generally side with the homeowner in matters disputing asset or tax issues, unless it would be unconscionable to do so; real estate is seen as an asset that should be largely free from taxation so owners can spend their money on improving the property itself.
Contact A Tampa Real Estate Attorney
Purchasing property can be a life-changing decision, so it is a good idea to make sure that you understand the potential advantages and disadvantages of doing so. If you have questions or concerns about the Florida homestead exemption, a Tampa real estate attorney from the Seward Law Office can help to clear them up. Contact our offices today at 813-252-6789 to speak to an attorney.
Resources:
flsenate.gov/Laws/Statutes/2019/196.031
flsenate.gov/Laws/Statutes/2018/196.081
