Page 14 - q3 2020

Sweet Home Florida:
It has been said that “Detroit builds cars, and Florida builds homes.” The Sunshine State’s appeal goes far beyond warm weather, white sand beaches, and no state income tax.
This is the first in a series of articles explaining the many benefits of homesteading in Florida. Sunshine State home- steaders are protected via three distinct categories as provid- ed for in the state constitution. First, owners of homestead property are entitled to specific exemptions related to ad valorem taxation. Second, there is some protection against forced sale by outside creditors. Third, a Florida homestead is restricted for purposes of alienation and devise by an owner.
Importantly, each of the three features of Florida’s home- stead protections has its own standards. That means that, for example, a property that qualifies for the homestead protec- tion from outside creditors may or may not qualify for the homestead benefit for ad valorem taxation, and vice versa.
It is the initial taxation benefit that this article will explain, with future articles covering Save Our Homes, portability, and the other advantages.
Calculating Florida’s homestead tax exemption is a bit complicated. The current exemption is $50,000 deducted from the assessed value, of which the first $25,000 applies
to all property taxes including school district taxes, and the second $25,000 applies to assessed values between $50,000 and $75,000 and only to non-school taxes. For example,
if you owned a home with an assessed value of $135,000,
the first $25,000 would be exempt from all property taxes, the next $25,000 of value would be fully taxable, the third $25,000 would be exempt from non-school taxes, and the final $60,000 would be fully taxable.
To initially qualify for a homestead exemption, one must meet several conditions. First, one must be a “natural per-
son” who holds a legal or beneficial interest in a property located in Florida on January 1 of a given tax year. That means that a person may hold title via a life estate, a stan- dard revocable living trust, or Florida land trust in most circumstances. Property owned in the name of an entity such as a corporation or LLC, however, does not qualify for the homestead exemption, even if the entity is solely owned by a person who resides on the property. The person must be a Florida resident who intends to make the property either their own home or the home of someone dependent upon them, such as a child. Note, however, that contrary
to popular belief, there is no minimum number of days per year that a person must reside in the property. The import- ant concept is an intent to return to the property, even if the owner is absent from it for many months. A provision in the Florida Statutes even allows you to rent your home for
a short term without affecting your homestead exemption. Specifically, you can rent your home after January 1 of any year and still keep the homestead exemption for that year, as long as the property is not rented for more than 30 days per calendar year for two consecutive years. Renting the home for any longer period will result in the loss of the homestead exemption.
United States citizenship is not a prerequisite for Florida homesteading—courts have ruled that intent to reside on the property, along with proof of permanent legal residency such as a green card, is sufficient. Other proofs of residence requirements vary from county to county. Lee county gen- erally requires a Florida driver’s license, at least one vehicle registered in Florida, a voter registration card or green card, and a copy of the deed to the property.