Florida has some of the most generous property tax laws in the nation, but unfortunately, most Floridians don't know how to completely take advantage of them.
There is A LOT more to it than just the basic $50,000 Homestead exemption and 80% of Floridians are overpaying. There are over 30 different exemptions you can be eligible for, market value errors to find, and an important strategy for maximizing your portability savings to transfer to your next home. Because of this, Floridians overpay $2500 a year on average!
When and Where, do I file for Homestead Exemption?
You “establish” your Homestead after you have completed the purchase of your home and you have moved in with the intent to permanently remain. In general, you must have changed your driver’s license to your new home address. If you reside part of the year out of state, you must reside in your home in Florida at least 183 days a year for it to be your Homestead. One note: the LAST date on which you can establish your Homestead and file for it THAT year is January 1st . So if you establish your Homestead on January 1st, 2019, then so long as you file for it by March 1st, 2019 you will get Homestead for the tax year 2019. If you establish your Homestead on January 2nd , 2019, then you will have until March 1st 2020 to file, and your Homestead will be considered in effect for the tax year 2019. Homestead is always considered effective on January 1 st for the year in which it goes into effect.
Where do I file?
You file for Homestead by filing a DR501 Form with your county Property Appraiser. If you are eligible for Portability then you must also file the DR501T form. Please note, you don’t automatically get Portability- you have to file the separate form! Many counties allow online filing but if you take advantage of this BE SURE that you follow up and call the Property Appraiser’s office to make sure that they received and processed your application.
What are the most common mistakes that people make regarding the Homestead Laws?
A. Forgetting altogether to file for Homestead.
If you forget, you’ll lose out on the $50,000 “Standard Exemption” which adds about $1,000 a year to your tax bill, plus any other exemptions you would have been eligible for, and then your Assessed Value on which you pay taxes can go up as much as 10% a year instead of being locked down by the 3% or CPI “Save our Homes” cap.
B. Forgetting to ask for and file for Portability.
Since you could have as much as $500,000 in Homestead Savings to move to your new home, this could cost you as much as $10,000 a year in extra taxes!
C. Missing an exemption for which you are eligible.
Remember, you may not be eligible for an exemption one year, but then you could become eligible the next year. Some exemptions completely exempt you from having to pay Property Tax!
D. Having an Inaccurate Market Value.
Each year when you get your Truth In Millage Rate Notice (TRIM) it will basically say “We have determined your Market Value as of Jan. 1st to be $X…. if you disagree with this, you must notify us by …. (date)”.
Most people think when they get their TRIM Notice that if they look at it and see that the Property Appraiser’s Market Value is substantially lower than what they know their home to be worth that they are getting away with something.
This is actually NOT the case. You want your Market Value to be accurate because remember, your Homestead Savings = Market Value – Assessed Value. So the higher your Market Value the better until you get to the $500,000 maximum portability amount.
Here is an example:
This home is currently on the market for $489,000.
The county has the home valued at $322,187.
If this homeowner was Homesteaded, they would be losing
almost $167,000 in portability, by not having the correct value on their property. That's like paying taxes on an extra house.
Here are some common types of Exemptions in Florida.
Primary Home (homestead): If you own a house in Florida as your permanent residence, you may be entitled to a property tax exemption, known as a "homestead exemption," of up to $50,000. The first $25,000 applies to all property taxes, including school district taxes. The additional exemption up to $25,000
applies to the assessed value. The precise amount of the exemption depends on the assessed value of the home. (See Florida Statutes § 196.031.)
Granny Flats: If you construct living quarters in your home for a parent or grandparent who is at least 62 years old, and that person actually continues living there, you can apply (annually) to either have the added value of your home be made exempt from property tax, or to have 20% knocked off the total, whichever is less. (See Florida Statutes § 197.703.)
Exemption for longtime limited-income seniors: If you are 65 years old or older, and have had a permanent Florida residence for at least 25 years, you may be entitled to a 100% exemption. Your eligibility for this exemption depends on the county or city where you live, and your income must be below a specified limit. This exemption applies only if your home is worth less than $250,000. (See Florida Statutes § 196.075.)
Disabled veteran. In addition to the usual homestead exemptions, you may qualify for a tax discount if you’re 65 years old or older, and have a disability that’s wholly or partly due to combat. (See Florida Statutes § 196.082.)
Other disabled people. If you’re blind, need a wheelchair for mobility, or are totally and permanently disabled, you qualify for a $500 exemption from Florida property taxes. (See Florida Statutes § 196.101.)
Understanding and taking advantage of these great programs can save you thousands of dollars every year. Sun National Title Company will guide you thru the process, during your next real estate transaction.