The Florida State Constitution provides for Florida homestead status which saves the homeowner on their real estate property tax assessments, caps the amount a homeowners property can be reassessed annually and protects a homeowner with asset protection for his home against third party creditors.
Article VII, Section 6 of the Florida State Constitution extends homestead protection to "every person who has the legal or equitable title to real estate and maintains thereon the permanent residence of the owner, or another legally or naturally dependent upon the owner..." Accordingly, to qualify you must own the real estate and make it you principle residence. You can own it individually, jointly or as the beneficiary of a trust holding the title.
When to File
Generally, initial application for property tax exemption must be made between January 1 and March 1 of the year for which the exemption is sought. The owner of the property must appear personally at the County Property Appraisers office and complete a Form DR-501 application for a tax exemption.
At the time of application it is required to produce a copy of:
1) Recorded deed reflecting property owner, or alternatively, a tax bill reflecting the legal description and owner's name;
2) Florida automobile registration;
3) Collier County voter registration card;
4) Social Security number
To be entitled to a homestead exemption for assessment purposes for the current year you must be a record titleholder as of January 1st, however, an application for homestead exemption can be applied anytime after a new residence is acquired. The deadline for any current yea application is March 1st. If an application is made after March 1st, the exemption is lost for tax purposes for the balance of the year but will be applied to take effect for the following year. Once homestead is applied for, it will roll over automatically every year until you vacate the property as your primary residence.
Once homestead is properly declared, Florida law provides the homeowner a $50,000.00 exemption from real estate tax assessment. For example, if a home is assessed at a market value of $250,000.00 the $50000.00 of this value is exempt from taxation thereby computing the property taxes on only $200,000.00. With and annual tax milage rate of approximately 1.5%, this exemption equates to an actual savings of $375.00 annually.
Assessment Cap Savings
Obtaining homestead status caps the amount a homeowner's property can be reassessed annually to 3% or to the percentage change in the Urban Consumer Index, which ever is lower. Annually properties throughout Collier & Lee County are reappraised to reflect the actual current market value. In the past this gas led to dramatic increases in certain years, however, due to the recent TRIM amendment to the Florida Constitution, the property owners are beginning to receive additional savings by applying for homestead exemption.
Third Party Creditor protection
The Florida Constitution provides homestead property with protection from third party creditors. The only exemption is if a property owner pledges his or her homestead property as security for a mortgage or improving the property and thereby subjecting the property to the construction lien law. Even after a property is sold, if there are judgment liens against the property owner provided the homestead proceeds are reinvested in another homestead property, they are again immune from third party claims.
$500 Widow's and Widower's Exemption
Any widow or widower who is a bona fide Florida resident may claim this exemption. On remarriage, the widow or widower is ineligible for the exemption. A person who is divorced before the spouse's death is not considered a widow or widower.
$500 Disability Exemption
A Florida resident who is totally and permanently disabled may qualify for this exemption.
$5,000 Disability Exemption for Ex-service member
An ex-service member disabled at least 10% in war or by service-connected misfortune may be entitled to a $5000 exemption on any property owned by the ex-service member.
$500 Exemption for Blind Persons
A Florida resident who is blind may qualify for this exemption. If claiming exemption based on blindness, the applicant must have a certificate of blindness issued by the Division of Blind Services of the Department of Education, the Federal Social Security Administration, or the Veteran's Administration.
Exemption for Totally and Permanently Disabled Persons
1.Real estate used and owned as a homestead by a quadriplegic, less any portion used for commercial purposes, is exempt from taxation.
2.Real estate used and owned as a homestead, less any portion used for commercial purposes, by a paraplegic, hemiplegic, or other totally and permanently disabled person, who must use a wheelchair for mobility or who is legally blind, is exempt from taxation.
A person seeking exemption under number 2 above must meet gross income limitations. Gross income includes veterans' and social security benefits. The gross income of all persons residing in the homestead for the prior year cannot exceed $14,500. However, beginning January 1, 1991, the $14,500 limitation will be adjusted annually. The adjustment will be based on the percentage change in the average cost-of-living index of the immediate year compared with the prior year.
If filing for the first time, a certificate of total and permanent disability from two licensed doctors of this state or from the Veterans' Administration is required.
Additional homestead exemption for persons 65 and older
In accordance with s. 6(f), Art. VII of the State Constitution, the board of county commissioners of any county or the governing authority of any municipality may adopt an ordinance to allow an additional homestead exemption of up to $25,000 for any person who has the legal or equitable title to real estate and maintains thereon the permanent residence of the owner, who has attained age 65, and whose household income does not exceed $20,000.
Beginning January 1, 2001, the $20,000 income limitation shall be adjusted annually, on January 1, by the percentage change in the average cost-of-living index in the period January 1 through December 31 of the immediate prior year compared with the same period for the year prior to that. The index is the average of the monthly consumer-price-index figures for the stated 12-month period, relative to the United States as a whole, issued by the United States Department of Labor.
Please consult your tax advisor for additional information concerning the Florida Homestead Exemption