3 Easy Steps to Take Advantage of Your Homestead Exemption

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By Michael J Posner

Over 300,000 new people became Florida residents in 2017, continuing a growth trend that shows no signs of slowing.  With the new tax act squeezing many residents of high tax states in the northeast, the trend of continued population growth in the sunshine state is only expected to rise in 2018.  Many new residents purchase new homes or convert their previous vacation or second homes in Florida into their primary residence.  If this purchase or conversion is completed by December 31, those new residents may be eligible to apply for a Florida Homestead Exemption the following year.

Florida has two types of homestead:

  • The first is set forth in the Florida Constitution under Article X, Section 4, which is an automatic provision to protect homeowners from claims of creditors or spouses who exclusively hold title, and to insure that a surviving spouse is not made homeless. This protection is automatic based upon purchasing a house, condominium or cooperative and making it your primary residence.
  • The second form of homestead is known as the Homestead Exemption, and it is also set forth in the Florida Constitution under Article VII, Section 6, which provides a financial exemption from real property taxation of up to $50,000 in home value. Additional exemptions are available for veterans over 65, low income senior citizens, surviving spouses of a veteran or first responder that died in the line of duty, and certain disabled persons.

Unlike the first type of homestead, the second form requires that the homeowner make application with the county’s property appraiser in a timely fashion.

  1. The first condition is that the property was your actual residence as of January 1 of the year you are applying for the exemption. This means you must have closed on the property before January 1 of the applicable year.  All applications must be submitted no later than March 1.
  1. In order to make a homestead application you will need to submit proof of residency. Proof includes a Florida Driver’s License or Florida ID if you do not drive, showing the address of the homestead residence.  Keep in mind that Florida law requires a resident who changes his address to obtain a replacement driver’s license with the new address within 30 days of the change.  If you own a car, proof of registration showing the address of the homestead residence is required.  Out of state residents that move to Florida with a vehicle are required to register that vehicle in Florida and obtain a Florida license plate. The registration card must show the primary residence.  All changes of address must also be reported to the Department of Motor Vehicle within 30 days of the change. Finally, a voter registration card with the primary residence address must be produced, if registered to vote.
  1. In addition, if the registrant is moving from a state without selling their former residence, issues can arise due to the old home retaining a homestead status in the prior state. The previous homestead status must be cancelled before obtaining a Florida homestead as this state does not allow or recognize two homesteads, and the cancellation would have to be done in the year prior to the first year claiming a Florida homestead exemption.

  Married couples who separate with one spouse relocating to Florida will have to prove that they have established separate family units in order to qualify for a Florida homestead while the other spouse maintains a separate homestead in another state.  The legal burden is high, but can be met by a showing of objective facts establishing that the spouses truly live apart.

Some people may be tempted by Florida homeowner exemption laws and try to skirt around the required steps only to face consequences later:

The unlimited creditor rights protection afforded by the Florida Homestead can drive people to relocate to this state.  However, simply buying a property and obtaining a driver’s license and voter registration card are not enough if you never intend to live in this state.  In a recent Palm Beach County case, a judgment debtor from California bought a Florida condo for 1.5 million in cash.  He also obtained a Florida driver’s license, voter registration card and a local library card.  Apparently the debtor was motivated to avoid a large judgment from a car accident.

However, at trial, the evidence showed that the debtor renewed his California driver’s license 11 days after obtaining his Florida driver’s license, never registered his car in this state, and, in what turned out to be the key evidence of lack of intent to move to Florida, was the debtor’s use of an access card at a Los Angeles gym, which showed that he went used more than 300 days in 2015 and over 150 days by mid-2016 (when he died).  His homestead was removed by court order and the judgment attached, allowing the creditor to obtain financial relief.

Michael J Posner, Esq., is a partner at Ward Damon, a mid-sized real estate and business oriented law firm serving all of South Florida, with offices throughout Palm Beach County.  Michael specializes in real estate law and business law, and can help with your homestead exemption and other real estate matters.  Michael can be reached at 561.594.1452 or by e-mail at mjposner@warddamon.com.

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