Our Family is Moving to Florida--What's a Homestead Exemption?

Homebuyers are enjoying low mortgage interest rates, combined with the many changes brought about by the COVID pandemic, with remote working become a reality for many. Naturally, these changes have led families to consider moving to the Sunshine State, and Florida is welcoming many homebuyers. Most buyers are unfamiliar with the complexities of Florida’s residency rules and the responsibilities imposed on property owners when claiming the benefits of Florida’s Constitutional homestead exemption.

While some buyers undoubtedly have heard that Florida affords its homeowners a homestead tax exemption of $450,000, the mechanics of actually filing for the exemption or even how to qualify aren't quite so simple. Many new Florida residents are unaware that acts committed unintentionally, if wrongfully filed, may land them in some hot water with penalties and lost exemptions.

Newcomers need and deserve sound counsel about Florida’s residency requirements and a stern warning that penalties for violations can result in the assessment of extremely hard penalties.

The Florida Homestead Exemption is the result of Floridian’s struggles to pay real estate taxes during the Great Depression. The legislation that resulted in Florida voters overwhelmingly approving the tax exemption gave relief to many.

In 1994, the Save Our Homes amendment was passed and established a 3% cap on the annual increase in assessed taxable values on homestead property.

Today, under Art. VII, Sec. 6 of the Florida Constitution, the homestead exemption law acts to protect homeowners who live in their property not only a large exemption over assessed value but also the Save Your Home Cap protecting against rising amounts from year to year.

Perhaps one of the greatest protections afforded by the Homestead Exemption law is the homestead protection against creditors claims. In cases where the homeowner is either a resident or citizen and resides in the home as their primary residence, they are immune from judgment creditors, seizing their home in order to satisfy a judgment.

To obtain a tax exemption in Florida, one must permanently reside on the property and be a resident as of January 1 of the year for which the exemption is sought.

Applications for Homestead Exemption run from January 1 to March 1, although late filing may be allowed with the showing of good cause.

Once Homestead is determined and the exemption granted, it renews automatically from year to year. No further action is necessary. Welcome to Florida!