The Florida Homestead Exemption is a property tax break that can save homeowners thousands of dollars each year. The exemption is available to homeowners who make Florida their permanent residence. To qualify, you must own the property on January 1st of the tax year and live in the home for at least 12 months of the year.
The homestead exemption is applied to the assessed value of your home. The assessed value is the value that your local government uses to calculate your property taxes. This exemption reduces your assessed value by $50,000, which means that you will pay property taxes on only the remaining value of your home.
Perhaps the biggest property tax benefit for Florida homeowners is the Save Our Homes Cap (SOH). The 3% SOH Cap limits any increase to the assessed value of a homestead exempt property for tax purposes to a maximum of 3% each year or the amount of the change in the Consumer Price Index, whichever is lower. To learn more about the homestead exemption, click here.
No full homestead exemption for partial rentals
Recently, The Florida Supreme Court ruled against a man that was claiming his full homestead exemption while still renting out part of his house. As a result, it was determined that 15% of his house was not eligible for the homestead exemption. The homeowner is now facing $7,000 in back taxes, penalties and interest for the tax years 2004 through 2013. Although the homeowner did in fact reside at the property as his primary residence, the lease agreement determined the portion of the home that was not in fact his residence.
The homestead exemption is a great benefit for homeowners in Florida. With this said, it is important that you adhere to the rules appropriately. In the example above, this homeowner is now responsible for paying back taxes due to this oversight.
Are you thinking about buying a home in Florida? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, don’t forget to download the free Florida Home Search App for your smartphone or tablet!