Homestead Exemption: What You Should Know

Amanda C. Tullidge — Bradenton Attorney

Amanda C. Tullidge, Esq., Real Estate Law

As we near the end of the year, now is the time for purchasers of new residences to consider the Florida homestead exemption and the many benefits it offers.

To be entitled to receive a homestead exemption in 2017, you must be the owner of record of your property and have established Florida residency by January 1, 2017. If you purchased a property this year to be your homestead, you may apply for the exemption until March 1, 2017, to take effect for the 2017 tax bill. Applications can be found at your local Property Appraiser office or their website.

The Florida homestead exemption reduces the assessed value of your residential property up to $25,000 for qualified permanent residents, and applies to all property taxes. A second $25,000.00 exemption was added in 2008, but does not apply to school taxes. Additional exemptions are also available to widows, widowers, low income seniors, the disabled and the blind. Individuals with total and permanent disabilities are exempt from paying property taxes on their homestead. Recently passed Amendments to the Florida Constitution will also offer exemptions to first responders disabled in the line of duty.

In addition to the two $25,000.00 exemptions previously discussed, Florida law also provides homestead property with the “Save Our Homes” cap. This provision caps the annual increase of the assessed value of homesteaded property from year to year at the lesser of three percent or the change in the consumer price index for the previous year. The base year for the Save Our Homes cap is the year in which the property owner qualifies and receives their homestead exemption. If you purchased a property to be your homestead this summer, for example, the exemption would take effect in 2017 and this would be your base year. Your property taxes would then be subject to the cap for the first time in 2018.

Once a property owner establishes the homestead exemption, it automatically renews from year to year until the property is sold or no longer qualifies. When an existing Florida homeowner establishes a new homestead, they are entitled to “port” up to $500,000.00 of their Save Our Homes tax benefits to their new home as long as they establish their new homestead within 2 years of abandoning their previous one.  “Portability” benefits are not automatic, but must be filed for using the Form DR-501T by the same March 1st deadline.

A thorough understanding of the Florida homestead laws is the key to saving on your property taxes. Please feel free to contact Blalock Walters real estate attorneys should you have any questions regarding homestead matters or any other real estate issues.