Speaker Intro:
Welcome to the Southwest Florida Realty show with Billee Silva and here’s your host Billee Silva!
Billee Silva:
Hello, this is Billee Silva with the Southwest Florida Realty show. Well, with March just around the corner if you purchased a home or condo in 2021 and have not yet filed for homestead tax exemption you need to do so today. So, what is homestead exemption and what does it mean to you as a homeowner?
Every piece of real property has a just value, an assessed value, and a taxable value. The just value is the property’s market value whereas the assessed value is the just value without the assessment limitations. And the taxable value is the assessed value minus exemptions and is the value the tax collector uses to calculate the property taxes due. The homestead exemption can thus result in exempting up to $50,000 of your home’s assessed value from tax liability. While the tax savings could be significant, not everyone is eligible for Florida Homestead Exemption. Before you apply for the homestead exemption, make sure you meet the following requirements: You are the actual property owner. The property you want to claim the exemption on must be for your permanent residence. You must have lived at the property on January first of the tax year in question. For example, if you hope to claim the homestead exemption on your 2022 property taxes, you must have lived at the property in question on January 1st, 2022. And lastly, you should not have rented the property for more than 30 days per calendar year, for 2 consecutive years or renting it as of Jan 1st of any tax year.
So, in order to receive the homestead deduction on your Florida property taxes, you must first fill out an application form and demonstrate proof of Florida residency by March 1st of the year for which you wish to qualify. You have three options for completing and submitting it, I think the easiest way is to go on the Lee County Property Appraisers website and complete the form online, but you can also print the form out and mail it in or take it to the tax collector’s office. Whether you complete the form online or in person, you’ll be asked to provide proof of your residency in Florida and at the address you want to claim the exemption for. Examples of documents that might work include a Florida driver’s license or State ID. A Florida vehicle registration number, Florida voter’s registration. Declaration of domicile and residency in Florida, proof of payment of utilities at the homestead address, school addresses of any dependent children you have, evidence that you’ve given up a driver’s license from another state, stuff like that.
One nice feature of the Florida homestead exemption is that you don’t have to reapply every year. Once you’ve been approved for the homestead exemption, your homestead will be automatically renewed by the State every year. However, it’s important to note that your homestead exemption does not transfer from property to property. If you had this exemption last year on another property and moved, you must file a new application for your new residence and notify the Property Appraiser to cancel the exemptions on your former home.
We’re really lucky though because Florida’s Portability law allows property owners to transfer their “Save Our Homes” benefit earned on a previous Homestead property to their new homestead property, lowering the tax assessment and, consequently, the taxes for the new homestead. If you are applying for a new Homestead Exemption and you held a homestead exemption on a previous property within the last 3 tax years anywhere in Florida, it doesn’t need to be Lee County, you should also submit a Portability application with your Homestead application. A Portability application transfers any tax savings you have earned, but it does not transfer your Homestead Exemption from one property to another. You must first apply for a Homestead Exemption in order to be eligible for Portability.
If you’re not familiar with what I was talking about with the “Save Our Homes” benefit, it’s another way Floridians see lowered property taxes. After the first year a home receives a homestead exemption and the property appraiser assesses it at just value, the assessment for each following year cannot increase more than 3%, this is called the “Save Our Homes” assessment limitation. So, if you have lived in your home for a long time and its Real Value far exceeds it’s Taxable value, then you are paying less in property taxes than the next person who will buy your home as the taxable value on the home will be raised back up towards real value for the new homeowner. Many first-time Florida homeowners are surprised when their tax bills are higher than the tax bills of the previous owners or their neighbors. When the property changes ownership, Florida law requires the property appraiser to remove exemptions and reassess the property, so the assessed value equals the just value. This takes effect on January first after you purchase the property. The previous owner’s exemption and “Save Our Homes” benefit stay with the property for the remainder of the calendar year in which you purchase your home, so your first tax bill would reflect the previous owner’s benefits if you bought the home before he or she paid that year’s tax bill. If you owned property on January first and apply for the homestead exemption by March first, your tax bill for the year will reflect the reduction in taxable value, but the “Save Our Homes” benefit will not take effect until the following year. It’s really an awesome benefit for homeowners, especially in this market where we’re seeing home values increase 30%.
However, it’s extremely important to contact the State if and when you become ineligible to claim the Florida homestead exemption. Florida law requires you to notify the Property Appraiser’s office to remove that exemption by March 1st and really strong penalties can apply if you don’t. Failure to do so could result in a Homestead Tax Lien with substantial penalties and interest if you do not tell the Property Appraiser to remove exemptions for which they are no longer qualified. So, some examples that will make you ineligible for homestead exemption are if you have rented out your property you more than likely forfeit your right to claim a homestead exemption because it’s no longer your primary residence because you’re no longer living there, someone else is. Other things that indicate it’s no longer your primary residence are if you change your voter’s registration and driver’s license to another residence, if you or your married spouse simultaneously claim homestead, or any other permanent residency-based tax exemption or credit on any other property anywhere else in the world. Other things that will get you in trouble are if the homesteaded owner dies and the property continues to claim the exemption in future years in the name of the deceased owner, or if you were receiving an exemption for widowed persons and remarry you would no longer be entitled to that exemption.
As Florida residents owning property, we are very fortunate to have these exemptions to reduce our property taxes and it’s not the only tax exemption available to Florida homeowners. Depending on your circumstances, you may be eligible for additional exemptions or discounts, such as, widows and widowers, low-income senior exemptions, disability exemptions and so forth.
I hope if you were not familiar with homestead exemption or are considering purchasing property, today’s podcast will help you be an informed homeowner so that you can reduce your property taxes. The ball is now in your court, so remember to meet that homestead tax exemption filing deadline of March first.
As always, thank you for tuning in and remember to share my podcast with your family and friends. Make it a great day!
Speaker’s closing remarks:
Thank you for listening to the Southwest Florida Realty Show with Billee Silva. To learn more about Billee Silva go to www.sw-floridarealtor.com. That’s www.sw-floridarealtor.com. Or call 239-247-2490.