For prospective purchasers that intend to use their Florida home as their primary residence, you should be aware of a couple of key benefits available to you under the current Florida homestead law. Once you homestead (a dwelling where a person makes his permanent home) a property in Florida, you are eligible to receive a $50,000 exemption on your property taxes. While this exemption is certainly beneficial, the most valuable benefit of Florida homestead law is the 3% cap on the annual increases in the assessment of homesteaded property.
For example, let's say you homestead a property and the value rises 20% over the next 4 years. Under current Florida homestead law, the assessed value of the property can only rise by 12% (3% maximum allowable increase X 4 years). Isn't that fantastic? If you notice a different amount of property taxes on similar homes in the same neighborhood, one of the reasons could be related to the Florida homestead law.
Of course, there can be pitfalls that can trigger the loss of a homestead exemption, and you will want to consult an attorney before making any changes in ownership to the property. Florida law provides that an exemption can be lost and reassessed at just value following a "change in ownership." A “change of ownership” is defined as “any sale, foreclosure, or transfer of legal title or beneficial title in equity to any person, except as provided in this subsection.” Obviously, when a home is sold a change in ownership occurs and triggers a re-assessment. However, other exceptions apply; because laws continue to evolve over time, you will want to be knowledgeable on current exemption law before making any legal changes in ownership to the property.
DESTINATION REALTY GROUP
Robert Casella, CLHMS - Licensed Realtor
Certified Luxury Home Specialist