HOMESTEAD TAX EXEMPTION IN FLORIDA
THE BEST HOMESTEAD TAX EXEMPTION FLORIDA HAS TO OFFER
EXPLORE FLORIDA RESIDENCYWHAT IS HOMESTEAD TAX EXEMPTION IN FLORIDA?
When we talk about the concept of homestead tax exemption in Florida, what we really mean is that lower property tax assessments are available on homestead property to owners of that property in Florida. For property to be considered ‘homestead’, only a Florida resident can claim a Florida homestead exemption, which means that they must reside in Florida with the specific intent intent of living in Florida permanently. There are two (2) components to these advantageous tax breaks available to permanent Florida residents.
First, if they meet the requirements, under the Florida’s current laws, each Florida homeowner can receive a homestead exemption up to $50,000. The first $25,000 in property value is exempt from all property taxes, including school district taxes. The additional $25,000 of the exemption is available for non-school taxes and applies only to the assessed property value that falls between $50,000 and $75,000.
Secondly, a ‘Save-Our-Homes’ Amendment passed by Florida, effectively limits the amount of appreciation that the taxing authorities can tax on these properties, as assessed at the “just value” on January 1st of each year. Essentially, the change in value cannot exceed the lower of 3% of the prior year’s assessment or the percentage change in the Consumer Price Index (CPI). Bottom line, no matter how much your property appreciates in value as a permanent Florida resident, the value that is assessed for tax purposes cannot exceed 3% of last year’s value, thus greatly limiting the potential tax burden for homeowners, especially in areas with high end luxury home development, or rapidly appreciating property values.
For more information on the benefits of Florida residency, click the link below.
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HOW TO QUALIFY FOR FLORIDA’S HOMESTEAD TAX EXEMPTION
There are three requirements for homestead tax protection under Florida law: residency requirements, acreage limitations, and a natural person limitation, as described below.
Residency Requirements
Determining whether someone intends to live in Florida permanently can sometimes be challenging. To help avoid misinterpretations of intent, those wishing to take advantage of the benefits of living in Florida, can file an affidavit with the county clerk stating that they intend to reside in Florida permanently, with similar processes available for people who own homes in multiple states. Certain factors may be used to determine if the person is a permanent Florida resident, including the issuance of a Florida driver’s license, vehicle registration in Florida, Florida voter registration, the usage of a Florida address on tax returns, or the drafting of a last will and testament under Florida law.
Acreage Limitations
Florida homestead protection only protects a homestead if it meets certain acreage requirements, and the amount depends on whether the homestead is located within a municipality. If the property is located within a municipality, only one-half an acre can be protected by the Florida homestead exemption but if the residence is located outside a municipality, up to 160 acres can be protected, and this includes buildings and other structures on that property, even if used for business purposes, whereas other structures used for business purposes would not be protected if the home is located within a municipality.
“Owned by a Natural Person” Limitations
To qualify for homestead protection, the property must be “owned by a natural person” (a human being), although other forms of ownership—such as the present right to possession of the property can sometimes qualify for homestead protection, such as a case where a husband’s equitable interest in property currently titled in his wife’s name was enough to qualify for homestead protection.
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SHOULD YOU CONSIDER BECOMING A FLORIDA RESIDENT?
Becoming a permanent Florida resident isn’t hard. It’s simply a matter of weighing the benefits of Florida residency when it comes to protecting your new property and maximizing your wealth, and then taking some basic steps:
- File a Florida Declaration of Domicile
- Get a Florida Driver’s License
- Register Your Vehicle(s) In Florida
- Register to Vote in the State of Florida
- Open Local Florida Bank Accounts
- Notify Tax Officials for Both States
- Apply for the Florida Homestead Exemption
- Update Your Estate Plan
And after doing these simple tasks, remember to strategically alter your tax relationship with your old state of residence, especially if the state you’re exiting has a state income tax or a state estate tax, which means you’ll need to terminate your “resident status” there to make your change of residence complete.
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“Keith is a fantastic builder, easy to work with. Excellent craftmanship!”
ANN & JOHN KURIAN, BELLA COLLINA, FL“A whole fantastic experience, the whole thing went really smooth. Keith Clarke was very reachable with any of my needs and I just wish them all the success in the world.”
IAN HILTON, BELLA COLLINA, FL