Property Tax Savings-Homestead Exemption
Contact past buyers to remind them they can start saving on their home’s property taxes by filing for their Homestead Exemption. If they made their new home their primary residence, they may be eligible to reduce the taxable value of their homestead by $25,000 for school taxes and by $50,000 for non-school taxes.
Apply by March 1 in order to receive the homestead exemption which begins the year following the first year they’re granted the homestead exemption. Their assessment and taxes may not reflect what the previous owner paid as indicated on the MLS.
If the previous owner homesteaded, they may have received the benefit of the cap on assessment increases in addition to the homestead exemption. The new owner’s assessment will be adjusted to the market value the year after they purchased. So, it’s important to file as soon as a new owner qualifies. The Florida Constitution provides for a 3% cap on assessment increase on homesteaded properties which is referred to as Save Our Homes exempt value (SOH). SOH exempt value is market value you do not pay taxes on due to the capped assessed value. The statute declares that the assessed value increase will not exceed 3% or the Consumer Price Index, whichever is less, each year following the year the homestead exemption was received.
Homestead Exemption doesn’t transfer automatically, so a new application must be filed if a homeowner moved during the year. Beginning with the 2008 tax year, property owners could transfer all or some of the SOH exempt value up to $500,000. In order to qualify for the portability, owners must have sold the previously homesteaded property in the previous two tax years and have qualified for a homestead exemption on the new home for the current tax year.
Owners may qualify for an additional homestead exemption of $50,000 if they are 65 years of age or older, but the household income (cumulative “adjusted gross income”) of all persons living in the home may not exceed the yearly amount as determined by the Florida Department of Revenue. This exemption applies only to the property taxes levied by the taxing authority granting the exemption and reapplication must be made each year. State law also provides an additional exemption for widows, widowers, total and permanently disabled civilians and honorably discharged disabled veterans.
Owners seeking Homestead Exemption must complete an application form in person at the Property Appraiser’s office. Bring the following: a recorded deed or tax bill in your name, Florida driver’s license, Florida auto tag registration, county voter’s card if a registered voter, social security numbers for applicant and spouse, declaration of domicile filed with the Clerk of the Circuit Court (if you have recorded one), documentation that any resident based exemptions on out of state property has been removed, copy of a trust if the property is owned that way. Non U.S. citizens must present a green card at the time of filing. All documentation must be dated prior to January 1 of the tax year for which you are applying for exemption.
Written By: Kathy Zorn