Is your tax exemption legal?
Florida statutes are vague when it comes to describing who qualifies for homestead tax exemption status and Save Our Homes tax breaks. To qualify, a person must intend for their Florida home to be their permanent residence on Jan. 1 of the tax year. There are no clear requirements, however, for how much of the year that person must live in the home.
Beyond the residency requirement, what is considered illegal homesteading changes from one county to the next depending on how local officials interpret state law. Questionable practices include:
* Renting out a home you own;
* Applying for homestead status on more than one property;
* Putting one homesteaded property in a husband's name and a second in a wife's.
* A person loses their protected status if they sell their home, give it away or will it to relatives who aren't already listed as owners.
The penalties:
You are breaking the law if you claim a homestead illegally, but chances are you won't be prosecuted. Instead, counties typically place a lien on the property to collect the unpaid taxes, fees and interest. In addition to forcing repayment of any money saved, state law allows for a 50 percent tax penalty and 15 percent annual interest on the illegal savings. Someone who saved an average of $2,000 a year for five years could be hit with a $16,500 bill.
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