Florida Homestead Info

[Kyle Sosnowski]

Hi all, 

I currently am reading a book that frequently mentions Homestead Exemptions in Florida (obviously due to the unlimited coverage) 

The reason for this post is, I am not currently located in Florida as of yet. And would love to hear any personal opinions of Homestead as a whole. From stories of it being used, pros and cons, or any general information would all be greatly appreciated. 

I am just a new investor trying to learn alittle about a lot, and look forward to hearing from you all. 

God bless. 

[Brad Ainslie]

Hi Kyle, 

As long as you are the owner and living in a property, the homestead exemption will not expire or need to be renewed.    The “save our homes” was a constitutional amendment passed by the citizens, and this essentially caps how much the taxable value of a house can grow when a homestead exemption is in place to 3% a year.    

The basic process is after you purchase a home and establish residency, go to the county tax appraiser website and register for homestead exemption     

An example.  
Say a homeowner purchased their home in 2009 for 130k.   
homestead exemption reduces by $50k the taxable value to 80k.   

The county tax assessor cannot reappraise that house under homestead exemption.    
the taxable valuation can only be increased by 3% per year.  
in 2023, assuming the same person owns the house and still lives in that house, the maximum taxable valuation would be $113k

In today’s market the house could theoretically be sold at $350k, but the tax assessor cannot adjust the taxable value to market value under homestead exemption 

should the owner decide to turn that house into a rental property, they would lose homestead exemption.    The tax assessor can then reappraise the house at market value and the tax bill will skyrocket on the property.   It is the owners responsibility to report the change in status.   

If the owner sells that house, and purchased a new house in Florida as their primary residence, they can transfer the tax savings to the new house   

This part is much more complicated and I can’t fully explain how this transfer works.   

The new owner of the house now on record as being purchased at $350k could apply for homestead which the taxable value could be $300k  ($50k is exempt from tax) for that new owner if it is the primary residence     

for any investor who does not live at the property they own, homestead does not apply and cannot be used for that property