KEY FACTS TO CLAIMING HOMESTEAD EXEMPTION IN FLORIDA

As Florida residents, we are fortunate to have one of the most generous homestead laws that allow protection to our primary residence from claims by creditors. These laws protect our homes from being forcibly sold to pay creditors.   While others states have laws which are similar, the laws of Florida homestead provide extra protection for our homeowners. There is an unlimited amount of protection in value for the home, even when the home is one that is luxurious worth millions of dollars, it will nonetheless be fully protected from creditors. This protection prohibits the forced sale of a property to pay certain creditors. However, one should note that the protections do not apply to sale for debts from property taxes, mortgages, construction liens, vendor’s liens or special assessments. 

The Florida Constitution provides protections for the person who claims a property as their principle place of residence. In Florida, the homestead protects up to 160 acres of property outside of a municipality and up to ½ acres within a municipality. In order to obtain homestead in Florida, the property owner must apply to the county appraiser’s office with documentation providing proof of home ownership, generally before March 1st of the year the owner plans to claim the exemption. However, there are different timelines for the application based on the different counties in Florida. These exemptions are only available to an individual’s primary home; it does not apply to businesses, rental properties, second homes, homeowners claiming permanent residency-based exemptions or tax credits in other states, or homes with owners that do not claim Florida as their primary residence. 

In order to quality for Florida homestead, you must be a US citizen and a permanent resident. Non-citizens can claim the Florida homestead exemption only if they have children who were born in the US and who live in the home and are dependent on the owner of the homestead. There are several factors which constitute permanent residency, such as: filing income tax returns in the State of Florida as a resident, voting in the State of Florida, obtaining a Florida driver’s license, and others. It is important to note that residents can be subject to a tax lien when they inadvertently forget to remove their homestead from another state when filing for homestead in Florida, which occurs commonly with New Yorkers relocating to Florida. 

Not everyone qualifies for Florida homestead exemption. As a permanent resident in Florida, you can save hundreds of dollars in property taxes. The exemption allows for a Florida resident to reduce the assessed value of their homestead to $50,000. The property tax assessment determines the market value of a property. Each parcel of real property has a just value, which is the property’s market value. It also has a taxable value, which is the assessed value minus the exemptions. This value is what the tax collector uses to calculate the taxed due on the real property each year. 

Florida provides several restrictions on how a homestead can be devised to heirs. Under Article X, section 4 of the Florida Constitution, homestead cannot be devised if the homeowner is survived by a spouse or minor children. However, the homestead may be devised by the owner’s spouse if there are no minor children. Minor children have the first priority in receiving the homestead upon the death of the owner, even if there is a spouse. As long as the deceased homeowner does not leave the property to someone other than minor children or spouse, or a qualifying heir, the homeowner will continue to be protected from creditor claims after their death. 

The Florida Constitution does not grant an absolute right to homestead exemption. Neither a Limited Liability Corporation nor a Subchapter S-Corporation have the ability to claim homestead exemption on behalf of its owners. Under Article X, Section 4 of the Florida Constitution, I provides as follows: “There shall be exempt from forced sale under process of any court, and no judgment, decree, or execution shall be a lien thereon,… property owned by a natural person.” In simple terms, the Florida Constitution requires the owner of the real property be a natural person to claim the homestead exemption. However, there are case law that provides that property held in a revocable living trust can qualify for homestead protection, but the properties titled in the name of an LLC, Corporation or a Partnership does not qualify. This is due to the language in the Florida Constitution requiring that an individual must have an ownership interest in a residence which allows them the right to use and occupy the property as his or her place of abode, to qualify for the exemption.