FLORIDA HOMESTEAD PROPERTY TAX EXEMPTIONS "101"
Introduction: The $25,000 homestead tax exemption is a valuable benefit, typically worth $475-$1550 in annual property tax savings for residence owners permanently residing in the County. This article summarizes the basics that you need to know. Please refer to the Department Of Revenue's website at http://taxlaw.state.fl.us/taxlawmenu.asp
Click on the Property Tax Administration section for more information.
1. Criteria for Eligibility. The applicant must: A. have title to the residence; B. reside thereon; C. be a Florida resident (A., B. & C. all as of January 1st of the year of application); and D. apply (in person or by mail via a downloaded application available from us at http://www.floridahomesteadservices.com)
by March 1st (late filed applications may qualify in limited cases).
Florida residency is usually initially established by holding Florida driver's license, Florida vehicle tag(s), Florida voter registration number(s) or declaration of domicile, Social Security numbers and a recorded deed.
IMPORTANT PLEASE READ –
Homestead is NOT automatic; you must apply for the exemption in order to receive it! If you do not receive a postcard "Receipt for Exemption Application" by June 1, you must contact the Property Appraiser as soon as possible – your application may not have been received and you will not be granted an exemption. The Notice of Proposed Taxes (TRIM Notice) mailed mid August each year will reflect whether or not you received an exemption for the current (and prior) tax years. Review this document carefully – if you believe that you should have received an exemption and the exemption is not reflected on the Notice of Proposed Taxes, contact the Appraiser's Office immediately in order to verify your exemption status.
2. Significance Of January 1st Date. January 1st is Florida's legal assessment date. 192.042, Fla. Stat. The tax status of a residence as established on January 1st carries through for the entirety of the year.
Example #1: If the seller qualifies for the 2001 homestead exemption on 1/1/2001 and sells the home on 5/1/2001, the 2001 tax bill will reflect a 2001 homestead exemption. The buyer gets the benefit of the seller's homestead exemption for tax year 2001 only. The buyer must apply for the 2002 exemption by 3/1/2002.
Example #2: If the seller does not qualify for the 2001 homestead exemption on 1/1/2001, but resided there and sold the home on 1/2/2001, the buyer cannot qualify for a 2001 homestead exemption, as he/she did not own it on the assessment date of January 1st.The 2001 tax bill will reflect no homestead exemption. The buyer may apply for the 2002 homestead.
Tip: If a buyer will be a Florida resident and the seller does not have homestead exemption, if possible the buyer should purchase and reside in the residence on or before January 1st to qualify for the homestead exemption for the next available year.
3. "Transfers" of homestead exemptions. There is no such thing. An owner must reapply if he/she purchases another home and moves into it.
4. "Save Our Homes" ("SOH"). Mr. Wilkinson spearheaded this homestead assessment limitation, enacted in 1992. It limits annual assessment increases on homestead properties to 3% or the CPI, whichever is lower.
A residence is assessed at fair market value ("just value") the 1st year that it has homestead (the "base year"). The SOH cap applies beginning the 2nd year of homestead and thereafter so long as the owner remains as a permanent resident. The assessed value returns to fair market value in the year following homestead sale, rental or abandonment. The new owner may then begin the SOH cycle again by applying for homestead (Note: SOH does not apply to new additions or construction that previously escaped taxation).
SOH Example: The owner applies for homestead on 1/1/2000 and the 2000 assessment at fair market value is $100,000. The home appreciates in value 25% as of 1/1/2001. The 2001 CPI increase is only 3%. While the 2001 just value is $125,000, the 2001 SOH assessed value is only $100,000 + 3% ($3000) = $103,000. SOH shields the owner from 2001 property taxes on the $22,000 difference between the SOH assessed value and market value.
Tip: Buyers of residences with significant SOH savings will not get the benefit of the seller's SOH savings in the following tax year, because that next year's assessment will be based on market value. Unlike other states that may only reassess every few years, Florida law requires annual reassessment.
Disclaimer: This document is a general overview of homestead law and is not intended to provide specific legal advice.