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FLORIDA HOMESTEAD EXEMPTION
Florida homestead status is an important
concept which appears in three different sections of the Florida
State Constitution. First, obtaining homestead status on your
property saves the homeowner on their real estate tax assessments.
Secondly, obtaining homestead status caps the amount a
homeowner's property can be reassessed annually. Thirdly,
homestead status protects a homeowner with asset protection for his
home against third party creditors.
Article VII, Section 6 of the 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 for yourself. You can own it individually
or jointly or as the beneficiary of a trust holding the title.
Tax assessment savings
Once homestead is properly declared, Florida law provides the
homeowner a $25,000.00 exemption from real estate tax assessment.
For example, if a home is assessed at a market value of $150,000.00
the $25,000.00 of this value is exempt from taxation thereby
computing the property taxes on only $125,000.00. With and
annual tax milage rate of approximately 1.5%, this exemption equates
to an actual savings of $375.00 annually.
Assessment cap savings
Secondly, obtaining homestead status will cap 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 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.
Creditor protection
Finally, the Florida Constitution provides homestead property with a
shield of protection against third party creditors. Under
Florida law, homestead property is immune from any judgments, liens
or claims of third parties. The only exemption is if a
property owner affirmatively pledges his or her homestead property
as security such as 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.
How to apply
To apply for homestead exemption 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 will be necessary 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
Other forms of ownership
If property is held in a trust, the beneficiary can qualify for
homestead if it is their principle residence and a copy of the trust
document is produced reflecting that he or she is the beneficiary.
In cases where there are multiple owners holding title and some may
be out of state residents, the person who declares Florida their
residence and applies for homestead is entitled to a proportionate
share of the $25,000.00 exemption in proportion to their ownership
interest. Additional exemptions may be obtained for widows or
widowers, permanent disability or legal blindness as attested by
physicians. Only one property can be declared homestead
property and it is a criminal offense to file more than one
application.
Deadline for filing
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. |
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