If you’ve ever bought or considered buying residential property, you may have heard of Homestead Tax Exemption. Homestead Tax Exemption is a powerful tool that reduces the tax burden on the state’s homeowners, but what is the homestead exemption in Florida and how does it work?
Here’s your guide to using this exemption to maximize the value of Florida homeownership and minimize your tax burden.
What is the homestead exemption in Florida?
The Florida homestead exemption is a property tax break that’s offered based on your home’s assessed value and provides exemptions within a certain value limit. With it, you can reduce the taxable value of your home by as much as $50,000.
But what is the homestead exemption in Florida’s purpose? The homestead exemption in Florida addresses one of the reasons the cost of homeownership in Florida is so high: property taxes. The amount you pay can differ according to the city or even the county, but the average Florida homeowner pays $1,752 every year. If you already own a home in Florida or are looking to buy real estate, the Florida homestead exemption can help you reduce that burden.
Let’s explore how the homestead exemption works, how to submit your documentation, and how much you can save on your homestead property taxation.
How does the homestead exemption work?
If this is the first time you are applying for the homestead exemption, you may be confused by how it works. It’s a tiered system based on the value of your home. For instance, the exemptions could look like this:
- Up to $25,000 in value is exempted for the first $50,000 in assessed value of your home.
- The above exemption applies to all property taxes, including those related to your school district.
- You pay full taxes on any value between $25,000 and $50,000.
- For any assessed value between $50,000 and $75,000, an additional $25,000 is eligible for exemption. This exemption does not apply to school district taxes.
- Properties valued at over $75,000 are exempt at the previous levels, and then fully taxed for the portion over $75,000.
Perhaps some examples can better understand how the homestead exemption works (see Figure 1):
- $48,000 home: For this home, the first $25,000 in assessed value would be exempt from all property taxes. The remaining $23,000 is assessed value and is taxed normally.
- $70,000 home: For this home, the first $25,000 in assessed value would be exempt from all property taxes. The next $25,000 would be taxed normally. The remaining $20,000 in value would be exempt from all property taxes except school district taxes.
- $90,000 home: For this home, the first $25,000 would be fully exempt from taxes, the next $25,000 would be fully taxed, the following $25,000 would be exempt from all but school district taxes, and the final $15,000 would be fully taxed.
How do you qualify for a homestead exemption in Florida?
While the tax savings from an exemption could be significant, not everyone is eligible. The Florida homestead exemption rules include the following requirements:
- You are the property owner.
- The property you want to claim the exemption for must be your permanent residence.
- The property you want to claim should be the permanent residence of someone you can claim as a dependent on your taxes.
- You must have lived at the property on January 1 of the tax year in question. (e.g., If you hope to claim the homestead exemption on your 2023 taxes, you must have lived at the property in question on January 1, 2023.)
- The property you want to claim the exemption for may not have been rented for more than 30 days in a given calendar year. (Renting the property for more than 30 days for two consecutive years or for more than six months is considered an abandonment of the Florida homestead exemption.)
If you’re uncertain whether you meet these criteria, get in touch with your tax preparer or CPA. They can help you understand the details of Florida’s tax code to determine whether you legally qualify for the homestead exemption.
How much do you save with a homestead exemption in Florida?
Calculating the Florida homestead exemption starts with three distinct valuations for your property. These are its:
- Just value. This is your property’s market value.
- Assessed value. Your property’s assessed value is the just value without the assessment limitations.
- Taxable value. The taxable value of your property is its assessed value minus exemptions. This is the value the tax collector uses to calculate the taxes due.
Every home is different, but a homestead exemption in Florida can exempt up to $50,000 of your home’s assessed value from tax liability.
When to file for a homestead exemption in Florida
The next two questions are: What is the homestead exemption in Florida’s filing process and when should you start?
To get a homestead deduction on your Florida taxes, you have to fill out an application form online or in person.
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For Duval: https://tinyurl.com/County-of-Duval
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For St. Johns: https://tinyurl.com/County-of-StJohns
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For Clay County: https://tinyurl.com/County-of-Clay
You will need to demonstrate proof of residence by March 1 of the year for which you wish to qualify. For example, if you want to qualify for a Florida homestead exemption on your 2023 taxes, you must have filed this paperwork by March 1, 2023. Late filings are permitted, but you will need to explain the extenuating circumstances that caused you to miss the March deadline.
Whether you complete the form online or in person, you’ll be asked to provide proof of your residence at the address you want to claim the exemption for. You should confirm what is acceptable with the county property appraiser’s office, but a few examples of documents that might need include the following:
- A Florida driver’s license or state ID
- A Florida vehicle registration number
- A Florida voter’s ID
- Immigration documents, if you’re not a U.S. citizen
- Proof of previous residency in a place other than Florida, plus proof that that residency has ended
- Evidence that you’ve given up a driver’s license from another state
- Declaration of domicile and residency in Florida
- The name of your current employer
- School addresses of any dependent children you have
- A bank statement, plus a mailing address for a checking account
- Proof of payment of utilities at the homestead address
Does my Florida homestead exemption expire?
One nice feature of the Florida homestead exemption is that you don’t have to reapply every year. Unless you take action to cancel your exemption, your homestead will be automatically renewed by the state. Sometime after January first in each year, after you’re first approved for the homestead exemption, the state will mail you an exemption renewal.
The flip side of this is that it’s your responsibility to contact the state if and when you’re no longer eligible for the exemption.
- You are no longer eligible if one of the following is true:
- The home is no longer your primary residence or the residence of someone you can claim as a dependent.
- You rent the property for more than 30 days per year.
- The home has changed ownership, either because of a sale, divorce, marriage, death, or another event.
It’s important to contact the state’s Department of Revenue if and when you become ineligible to claim the Florida homestead exemption. If you don’t update your status, you could be subject to a tax lien that comes with both interest and penalties.
Can I keep my FL homestead exemption if I move?
You are not allowed to transfer your Florida homestead exemption when you move from one Florida homestead to another Florida homestead. However, Florida law allows for “portability” which means that you can transfer some or all of the assessment difference. This lowers the assessed value of the homestead. In order to use the Save Our Homes (SOH) assessment limitation, you must complete Form DR-501T along with the homestead exemption application.
Can you get a Florida homestead exemption on a mobile home?
Some mobile homes can qualify for a homestead exemption. If you own a mobile home and the land it sits on, then you must permanently affix the mobile home to the land to qualify for the exemption. You must pay a $3 fee to the property appraiser to receive a Real Property (RP) decal to mark your mobile home as real property. Mobile homes on leased or rented land do not qualify.
Other property tax exemptions in Florida
The Florida homestead exemption is a powerful way to reduce your property taxes – but it’s not the only tax exemption available to Florida homeowners! Depending on your circumstances, you may also qualify for one or more of the following:
- Construction for an older family member: Added a mother-in-law apartment to your home? You can apply to have that construction reduce the value of your total property. Complete the Original Application for Assessment Reduction for Living Quarters of Parents or Grandparents form. Note: you’ll have to re-apply for this exemption every year.
- Longtime limited-income senior exemption: This one’s a county-by-county exemption and is available only to those who are 65 or older, have lived in Florida for at least 25 years, and have income below a certain threshold. If you meet these criteria and your home is worth less than $250,000, you may qualify for a 100 percent exemption. Complete the Adjusted Gross Household Income Sworn Statement and Return form.
- Deployed service member: State law says this exemption amount depends on how many days you were deployed during the tax year. Complete the Deployed Military Exemption Application .
- Disabled veteran: A Florida state law may allow you to take this exemption on top of others you qualify for if you’re 65 or older and were injured during combat.
- Survival of a spouse killed in military service: Florida’s Fallen Heroes Act outlines the details of this exemption. See the county property appraiser for the correct paperwork.
- Surviving spouse of a first responder: If your spouse was the first responder and was killed in the line of duty, Florida law may make you eligible for this exemption. See the county property appraiser for the correct paperwork.
- Other disabled people: Various other disabilities (including blindness, permanent disability, use of a wheelchair, and others) may qualify you for a $500 Florida property tax exemption. You will need a Physician Certification and the Homestead Exemption Application to get this exemption.
One final note: Florida’s property tax exemptions reduce the amount of property taxes you’re responsible for paying; they don’t actually change the value of your property. When you’re choosing a homeowners insurance policy, it’s important to choose one that insures the full value of your home.