The Florida Homestead Exemption provides tax and liability protections for your primary residence. Nearly all Florida homeowners are entitled to claim it for their permanent residence, but there are several things you should know.
What does it mean to homestead your house in Florida?
When America was being settled, the Homestead Act was the law that gave them free land to establish a home and farm to support their family. Today, homestead means a permanent residence. This is different from a second home, vacation home, business, or other property.
Florida law provides several tax and legal benefits for a homestead property. In order to receive these benefits, you have to officially request the Homestead Exemption for your property.
What are the benefits offered by Florida Homestead law?
Florida provides two important sets of benefits for a homestead property.
Reduced Property Taxes
Florida homestead properties receive up to a $50,000 exemption from property taxes. The exemption is subtracted from the assessed value of your home. For example, if your home is worth $250,000, your property tax bill is based on a $200,000 value.
You also receive the Save Our Homes benefit. Save Our Homes limits increases in your home’s assessed value to 3% per year. If home prices rapidly rise, you won’t see a sudden increase in your property tax bill.
These tax benefits are explained in detail below.
Protection from Creditors
Florida homestead properties are also generally protected from creditors. If you’re in debt or lose a lawsuit, you generally won’t have to sell your home to pay what you owe.
This Florida homestead protection is also explained in more detail below.
Who qualifies for Florida Homestead?
There are three qualifications for the Florida Homestead Exemption under Florida Law 196.031.
Own the Property
For most people, the requirement to hold title or own the property is relatively straightforward. It’s a house that you bought.
You can’t claim an exemption for a house that you’re renting. Landlords also can’t claim homestead exemptions for rental properties even if it’s a tenant’s primary home. If you’re a landlord, see Florida Rental Property Taxes.
If you own the home with other people, you can still qualify for the Florida Homestead Exemption. The benefits are divided between you and the other owners. If another property owner doesn’t qualify, you can still receive your portion of the benefit.
One thing to watch out for is that the Florida Homestead Exemption is available for natural owners. You can’t claim the Homestead Exemption if you own your home through a corporation, LLC, or irrevocable trust. It doesn’t matter if you’re the sole owner or beneficiary. If you have estate planning or asset protection concerns, talk to an attorney about ways you can title the property to qualify for homestead protection.
Maintain the Property as Your Permanent Residence
The home also needs to be your permanent residence. Permanent residence means your main home.
There’s no minimum amount of time you need to live in the home before receiving the Florida Homestead Exemption. You can also intend to move in the future.
You’ll often see this requirement as being a permanent Florida resident. However, all you need to do is show that you intend to become a Florida resident. This includes taking steps like updating your Florida driver’s license, car registration, and voter registration.
The basic test is that the residence will be your main home as opposed to a second home, vacation home, or rental property that you use for part of the year.
For example, if you’re a travel nurse who goes to different states, you may need to return to your residence between jobs and/or make sure you spend more days there than you do in other states. Talk to a tax advisor if you’re in this type of situation to see what you need to do.
Reside in the Property
There is also a requirement that you or your dependents actually reside in the property. This basically means that you are in fact living there.
Generally, you’re allowed to travel or maintain a second home as long as you intend to return to your homesteaded home. Florida law has some exceptions for involuntary absences, such as being in a nursing home or having to move because of military orders.
When the law says as of January 1st, it doesn’t mean that you have to be physically in your home on January 1st or you lose homestead protection. You can travel for the holiday as long as you intend to return home.
Is there an income limit for the Florida Homestead Exemption?
There is no income limit for the basic Florida Homestead Exemption. There are income limits for other benefits, such as the additional exemption for seniors.
How do I claim the Homestead Exemption in Florida?
You can claim the Florida Homestead Exemption by contacting your local property appraiser or tax collector. Each county has an office where you can file for a new Florida homestead or transfer your Homestead Exemption from an existing home.
You will often need to show your title (or they will look it up) along with other documentation showing that you’re making the home your primary residence.
You can view a sample application here. Note your local tax collector’s office will often have its own form with slight modifications.
The deadline to apply for the Florida Homestead Exemption is generally March 1st. If you’re buying a home after that point, property taxes will have typically already been assessed to the prior owner.
Even if it’s after March 1st, you should notify the property appraiser as soon as your circumstances change. In some cases, you may be able to get additional time to claim your tax exemption.
How long is the Homestead Exemption good for in Florida?
You can claim the Homestead Exemption as long as you continue to meet the requirements. There is no expiration date or maximum number of years you can claim it.
Some places require you to fill out an annual renewal form. Others automatically continue your status as long as you own your home.
If you no longer meet the requirements for the exemption, such as making a different home your primary residence while keeping your original home, you must notify your tax collector as soon as possible.
Can you lose Homestead Exemption in Florida?
You can generally only lose your exemption if you no longer meet the requirements. This could include the eligibility requirements or if you never completed the required paperwork.
Local tax collectors are allowed to require you to confirm your eligibility each year. If you didn’t receive the renewal form or missed the deadline, contact them to discuss your options.
One important statute to take note of is 196.061. Renting out your home can constitute abandonment of your homestead, and this can potentially include short-term rentals totaling more than 30 days per calendar year for two consecutive years. The statute has an exception allowing military members who are away on permanent orders to rent their Florida homestead.
What happens when you move?
You can generally take your Homestead Exemption with you when you move from one Florida home to another. This is known as portability.
You can generally:
- Sell your house and buy another
- Swap your primary residence and second home without selling
- Sell your primary residence and homestead a second home you already own
- Sell your house and wait up to two years to buy another
If you had a Save Our Homes benefit, such as a $100,000 reduction in your home’s value, you can generally transfer that to your new home as well.
Can you claim a Homestead Exemption for a mobile home?
For tax purposes, a mobile home where you do not own the land under it is personal property rather than real property. Mobile homes on leased land don’t qualify for the tax exemption.
If you permanently affix a mobile home to land that you own, you can elect to have it taxed as real property. You would then be eligible to claim the Homestead Exemption.
How much does homestead save you in Florida?
The Florida Homestead Exemption provides multiple savings.
You pay no property tax, including school district taxes, on the first $25,000 of your home’s value.
You pay only school district taxes on your home’s assessed value between $50,000 to $75,000. If your home is worth $75,000 or more, this is effectively an additional $25,000 tax exemption.
With property tax rates between 1% to 3%, a $50,000 tax exemption is worth about $500 to $1,500 per year. Your exact savings will vary based on your local tax rates which are generally set at the county level.
Save Our Homes can also provide substantial savings. For example, your home’s value may have risen from $100,000 to $200,000, but Save Our Homes might cap the assessed value at $150,000. That $50,000 in reduced value is worth $500 or more in annual property taxes.
What is the Florida Homestead Exemption against creditors?
In addition to property tax benefits, the Florida Constitution provides for protection against creditors.
A Florida homestead is exempt from forced sale under process of court or judgment, decree, or execution of a lien in most cases. The exceptions are:
- Payment of taxes
- Obligations contracted for purchase
- Improvement or repair of the home
- Contractors’ liens for work on the home
- Mortgages and home equity loans
If you live outside of a city, you can homestead up to 160 acres of real property, potentially including a farm or business. If you live within a city, you can only homestead one-half acre and only including your residence.
Unlike the tax exemption, there are no limits on the value of the home when it comes to creditor protection.
To qualify, your property must be contiguous property. You can have multiple parcels in a homestead, but they generally must be connected with exceptions for things like roads.
Homestead protection generally extends to the surviving spouse and heirs, so creditors generally can’t make a claim against an estate that had homestead protection.
Like the tax exemption, creditor protections apply to natural persons. Properties held in corporations, LLCs, or certain trusts may not receive homestead protection.
What if there are multiple owners?
If there are multiple property owners and one or more doesn’t apply for Florida homestead protection, it may be possible for creditors to force a sale of a homestead property. The proceeds would be divided among the owners.
For example, assume two parents with homestead and a child without homestead protection. All three are on the deed as equal owners and the home is worth $150,000. The child’s creditors can force a sale and take up to $50,000. The parents keep their $100,000 and can use it for a new Homestead.
What if you sell your home?
If you sell your home, the proceeds of the sale generally still receive homestead protection to the extent that you are buying a new homestead.
This generally means either:
- Simultaneously buying a new home
- Actively search for a new home and keeping the sale proceeds in a separate bank account without using that money for any other purpose
What about mobile homes?
The Florida statutes, particularly 222.05, generally extend creditor protections to mobile homes even on rented lots.
Estate Planning Considerations
Florida homestead law can make advanced estate planning difficult because it generally doesn’t allow ownership by corporations, LLCs, and some kinds of trusts frequently used for estate planning in other states. Adding someone to your home’s title can weaken your current legal rights or affect your or their homestead benefits.
If you have concerns about estate taxes, asset protection, or similar topics, contact a Florida-based estate planning attorney.
Summary
- Florida Homestead law provides important tax benefits and protection against creditors.
- You typically qualify if you’re making a home your primary residence as a Florida resident.
- Apply and update your status with your local tax collector.
- Some places require you to renew annually.
- The exemption applies even if you move to a new primary residence in Florida.
- The creditor and estate planning benefits touch on complex issues that you should discuss with an attorney.