• Asset ProtectionFlorida Real Estate Homestead Tax Exemption

    In 1934, to assist its residents in their struggle against the hard economic times brought about by the Great Depression, Florida amended its Constitution to provide that the Homesteads of its citizens would be exempt from taxation up to a value of five thousand dollars ($5,000).


    This means that Homesteads having a value of five thousand dollars ($5,000) or less paid no real property taxes at all. Other Homesteads paid tax only on the assessed value in excess of five thousand dollars ($5,000).

    Although the original purpose for the Homestead Exemption has long since disappeared, this particular tax benefit afforded to Florida residents has been expanded and increased.

    Since 1983, a twenty-five thousand dollars ($25,000) Exemption has been afforded to all homeowners who are domiciled in Florida as of January 1st of a particular year.  (There is no longer a five-year residency requirement for obtaining a full Homestead Tax Exemption.)

    Additional recent amendments to the Florida Homestead Law provided that the benefits of Homestead Tax Exemption extend to persons occupying property under a contract to purchase if the contract is duly recorded; that a surviving spouse who occupies the Homestead following the death of their spouse may claim the Homestead Tax Exemption; extended the Homestead Tax Exemption to owners of cooperative apartments and those condominium apartment projects built upon land owned in fee by the condominium as well as those projects built upon leaseholds, provided the leasehold has an original term of ninety-eight (98) years or more (an important consideration for those people who plan to buy a condominium apartment in Florida); and provided for continued entitlement to the Homestead Tax Exemption to those individuals who transfer title of their “Homestead” property to a Revocable Trust or Declaration of Trust, in which the transferee enjoys the right to the use and occupancy of the property for their lifetime.

     Since 1995, Florida homeowners have also been afforded a three percent (3%) cap on increases in the assessed value of Homestead through the Save Our Homes Constitutional amendment.

    Under a new Constitutional amendment passed by Florida voters on January 29, 2008, the Florida Homestead Exemption increased from twenty-five thousand dollars ($25,000) to fifty thousand dollars ($50,000) on a Homestead having an assessed value of greater than seventy-five thousand dollars ($75,000).

    No additional application for the increased Exemption is necessary if the homeowner was already receiving the prior twenty-five thousand dollar ($25,000) Exemption.

    Under the same legislation, homeowners currently receiving Exemption benefits may sell their current Homestead and transfer a portion of the accumulated Save Our Homes tax savings to a new Homestead that also qualifies for Homestead Exemption benefits.

    If the new Homestead has a higher assessed value than the prior Homestead, the homeowner is entitled to transfer the amount of the accumulated savings to the new home, up to five hundred thousand dollars ($500,000), thereby lowering the assessed value by the same amount.

    For example, if the prior Homestead has a just value of five hundred thousand dollars ($500,000), but because of Save Our Homes, the assessed value is only two hundred thousand dollars ($200,000), the difference of three hundred thousand dollars ($300,000) may be applied to reduce the assessed value, of the new Homestead.

    The amount of the accumulated savings that is eligible for transfer will be a percentage of the tax savings.  Using the example above, the ratio of the assessed value to the just value ($200,000 / $500,000 = $40%) is the amount that may be applied to the assessed value of the new Homestead (40% x $300,000 = $120,000).

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    If you or a loved one needs help with a situation involving one of these areas, please contact Thomas N. Silverman, P.A. at 561.775.7500 (24 hours) or info@FloridaProbateCounsel.com.

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