This is a quick guide as to the meaning and benefits of the Florida Homestead Exemption. While many states have some sort of Homestead benefits, Florida’s Homestead laws provide the Country’s most generous set of benefits to its homeowners.
The term Homestead exemption in Florida may refer to four different types of homestead exemptions/benefits under Florida law:
1) exemption from forced sale before and at death per Art. X, Section 4(a)-(b) of the Florida Constitution;
2) restrictions on devise and alienation, Art. X, Section 4(c) of the Florida Constitution;
3) exemption from taxation per Art. VII, Section 6 of the Florida Constitution;and
4) and limitation on increase in taxable value to 3% per year and Portability, per Art. VII, Section 4 of the Florida Constitution.
1. BENEFIT 1 – exemption from forced sale before and at death per Art. X, Section 4(a)-(b) of the Florida Constitution. Simply means your home is safe from forced sale from judgments. However, this obviously does not include protection from mortgage foreclosure of construction liens.
ART X, SECTION 4. Homestead; exemptions.—
(a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person:(1) a homestead, if located outside a municipality, to the extent of one hundred sixty acres of contiguous land and improvements thereon, which shall not be reduced without the owner’s consent by reason of subsequent inclusion in a municipality; or if located within a municipality, to the extent of one-half acre of contiguous land, upon which the exemption shall be limited to the residence of the owner or the owner’s family;(2) personal property to the value of one thousand dollars.(b) These exemptions shall inure to the surviving spouse or heirs of the owner.
2. BENEFIT 2. restrictions on devise and alienation, Art. X, Section 4(c) of the Florida Constitution. Simply means, homestead property is not subject to devise (a will or other testamentary gift) if the owner is survived by a wife or minor child.
ART X, SECTION 4. Homestead; exemptions.—(c) The homestead shall not be subject to devise if the owner is survived by spouse or minor child, except the homestead may be devised to the owner’s spouse if there be no minor child. The owner of homestead real estate, joined by the spouse if married, may alienate the homestead by mortgage, sale or gift and, if married, may by deed transfer the title to an estate by the entirety with the spouse. If the owner or spouse is incompetent, the method of alienation or encumbrance shall be as provided by law.
3. BENEFIT 3 – exemption from taxation per Art. VII, Section 6 of the Florida Constitution. Simply put, all homestead property receives a $25,000.00 assessed value discount for your school district taxation, and a $50,000.00 for all other (county, municipal) taxations. Disabled, veterans, elderly, may be eligible for additional homestead assessed value discounts.
ART VII, SECTION 6. Homestead; exemptions.—
(a) 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, shall be exempt from taxation thereon, except assessments for special benefits, up to the assessed valuation of twenty-five thousand dollars and, for all levies other than school district levies, on the assessed valuation greater than fifty thousand dollars and up to seventy-five thousand dollars, upon establishment of right thereto in the manner prescribed by law. The real estate may be held by legal or equitable title, by the entireties, jointly, in common, as a condominium, or indirectly by stock ownership or membership representing the owner’s or member’s proprietary interest in a corporation owning a fee or a leasehold initially in excess of ninety-eight years. The exemption shall not apply with respect to any assessment roll until such roll is first determined to be in compliance with the provisions of section 4 by a state agency designated by general law. This exemption is repealed on the effective date of any amendment to this Article which provides for the assessment of homestead property at less than just value.…(e) Each veteran who is age 65 or older who is partially or totally permanently disabled shall receive a discount from the amount of the ad valorem tax otherwise owed on homestead property the veteran owns and resides in if the disability was combat related, the veteran was a resident of this state at the time of entering the military service of the United States, and the veteran was honorably discharged upon separation from military service. The discount shall be in a percentage equal to the percentage of the veteran’s permanent, service-connected disability as determined by the United States Department of Veterans Affairs. To qualify for the discount granted by this subsection, an applicant must submit to the county property appraiser, by March 1, proof of residency at the time of entering military service, an official letter from the United States Department of Veterans Affairs stating the percentage of the veteran’s service-connected disability and such evidence that reasonably identifies the disability as combat related, and a copy of the veteran’s honorable discharge. If the property appraiser denies the request for a discount, the appraiser must notify the applicant in writing of the reasons for the denial, and the veteran may reapply. The Legislature may, by general law, waive the annual application requirement in subsequent years. This subsection shall take effect December 7, 2006, is self-executing, and does not require implementing legislation.
4. BENEFIT 4 -limitation on increase in taxable value to 3% per year and Portability, per Art. VII, Section 4 of the Florida Constitution. This is the “Save Our Home” Benefit, where Homesteaded property, cannot be assessed taxes on more that 3% over the previous years’ “just value.” This was especially relevant when home prices were skyrocketing. In that case, taxes on homesteaded property were not likewise skyrocketing for people who had already owned their home. Now you can even maintain your “Save Our Home” benefit on a new property by the portability option of SECTION 8(A) of ARTICLE VII SECTION 4 below.
ART VII, SECTION 4. Taxation; assessments.—By general law regulations shall be prescribed which shall secure a just valuation of all property for ad valorem taxation, provided:
…(d) All persons entitled to a homestead exemption under Section 6 of this Article shall have their homestead assessed at just value as of January 1 of the year following the effective date of this amendment. This assessment shall change only as provided in this subsection.
(1) Assessments subject to this subsection shall be changed annually on January 1st of each year; but those changes in assessments shall not exceed the lower of the following:
a. Three percent (3%) of the assessment for the prior year.b. The percent change in the Consumer Price Index for all urban consumers, U.S. City Average, all items 1967=100, or successor reports for the preceding calendar year as initially reported by the United States Department of Labor, Bureau of Labor Statistics.(2) No assessment shall exceed just value.(3) After any change of ownership, as provided by general law, homestead property shall be assessed at just value as of January 1 of the following year, unless the provisions of paragraph (8) apply. Thereafter, the homestead shall be assessed as provided in this subsection.(4) New homestead property shall be assessed at just value as of January 1st of the year following the establishment of the homestead, unless the provisions of paragraph (8) apply. That assessment shall only change as provided in this subsection.(5) Changes, additions, reductions, or improvements to homestead property shall be assessed as provided for by general law; provided, however, after the adjustment for any change, addition, reduction, or improvement, the property shall be assessed as provided in this subsection.(6) In the event of a termination of homestead status, the property shall be assessed as provided by general law.(7) The provisions of this amendment are severable. If any of the provisions of this amendment shall be held unconstitutional by any court of competent jurisdiction, the decision of such court shall not affect or impair any remaining provisions of this amendment.(8)a. A person who establishes a new homestead as of January 1, 2009, or January 1 of any subsequent year and who has received a homestead exemption pursuant to Section 6 of this Article as of January 1 of either of the two years immediately preceding the establishment of the new homestead is entitled to have the new homestead assessed at less than just value. If this revision is approved in January of 2008, a person who establishes a new homestead as of January 1, 2008, is entitled to have the new homestead assessed at less than just value only if that person received a homestead exemption on January 1, 2007. The assessed value of the newly established homestead shall be determined as follows:
1. If the just value of the new homestead is greater than or equal to the just value of the prior homestead as of January 1 of the year in which the prior homestead was abandoned, the assessed value of the new homestead shall be the just value of the new homestead minus an amount equal to the lesser of $500,000 or the difference between the just value and the assessed value of the prior homestead as of January 1 of the year in which the prior homestead was abandoned. Thereafter, the homestead shall be assessed as provided in this subsection.2. If the just value of the new homestead is less than the just value of the prior homestead as of January 1 of the year in which the prior homestead was abandoned, the assessed value of the new homestead shall be equal to the just value of the new homestead divided by the just value of the prior homestead and multiplied by the assessed value of the prior homestead. However, if the difference between the just value of the new homestead and the assessed value of the new homestead calculated pursuant to this sub-subparagraph is greater than $500,000, the assessed value of the new homestead shall be increased so that the difference between the just value and the assessed value equals $500,000. Thereafter, the homestead shall be assessed as provided in this subsection.…