Property tax savings... don't forget to homestead
- Jan 26, 2018
- 3 min read
Updated: Jun 27
I was talking to some friends of ours last year and mentioned Homestead. They asked what was Homestead... now, keep in mind this couple purchase Naples property nearly 8 years ago. Unfortunately, I was not their Realtor at the time so they did not know about Homestead Exemption. Needless to say, 8 years later, they went and filed and learned how much taxes savings they missed out on as full-time residents. It is important to point out that these are highly intelligent and successful people. It was just unfortunate that no one had ever shared this information. Thus the inspiration from this post. Don't miss out on your tax savings opportunity.
There are tax advantages to owning property in Naples, Florida AND occupying it as your primary residence. The homestead provides $25,000 homestead exemption from the assessed value of the home for city, county, and school board taxes. and an additional $25,000 exemption from city and county taxes (except for school board taxes) on the property’s assessed value between $50,000 and $75,000. The property tax exemption for a homestead is deducted from the assessed value of the property before property taxes are calculated.
Homesteading involves identifying one property in Florida as your primary residence. This means that you live in that property more than 6 months and have NOT declared any other property in Florida or any other state as your primary.
‘Homesteading’ entitles owners to a few distinct advantages. Married couples receive a $50,000 reduction in the assessed value of their home (singles get a $25,000 reduction). This means that the taxable value of the home is reduced by $50,000.
Important -Filing for the exemption can be made up to March 1, though proof of residency must be dated before January 1 in order to receive the tax break for the upcoming year. This means that Homestead tax benefits will not be received for the same calendar year that permanent residence is established.
A person who, on January 1, has the legal title or beneficial title in equity to real property in this state and who in good faith makes the property his or her permanent residence or the permanent residence of another or others legally or naturally dependent upon him or her, is entitled to an exemption.
To qualify you must be a permanent resident of Florida as of January 1st of the year in which you apply for the exemption. Florida law does allow new homestead applications to be filed prior to January 1st of the year the exemption is to be effective. However, pre-filed applications will only be accepted after March 1st of each year for the succeeding year.
Additionally, as a homesteaded qualifying property, you are also covered under the SAVE OUR HOMES amendment. The Save Our Home amendment of the Florida Constitution caps how much the assessed value of homesteaded property may increase in a given year. The county is limited in raising assessed values by no more than 3% per year.
According to Chapter 193, F.S., the just value of homesteaded property may be increased either 3 percent annually (based on the assessed value for the prior year); or the percentage change of the Consumer Price Index (CPI) for the preceding year, whichever is less.
The Save Our Home (SOH) benefit is the difference between the assessed value and the market value of a homestead property due to the annual limit on increases in assessed value. Effective 2008, the Save Our Home benefit is portable.
Homeowners who have had the homestead exemption on their current home in either of the two preceding years can transfer their SOH benefit to a new home. A homesteaded property owner can transfer up to $500,000 of SOH benefit to a new homestead. Property owners moving to a more expensive home transfer up to the entire $500,000 benefit. Property owners moving to a less expensive home transfer the same proportion of tax savings realized in the previous homestead.
The table below displays the applicable homestead exemption depending on the amount of assessed value.
TO ENSURE THAT YOU ALWAYS HAVE THE MOST UP-TO-DATE INFORMATION ON HOMESTEAD AND SAVE-OUR-HOMES, BE SURE TO VISIT THE COLLIER COUNTY APPRAISERS WEBSITE. THIS IS ALSO WHERE YOU CAN GET INFORMATION ON HOW AND WHERE TO APPLY ALONG WITH WHAT DOCUMENTATION IS NEEDED.
Here are some additional resources:
Collier County. Consumer Protection https://www.floridabar.org/public/consumer/tip006/
Florida Constitution Fla. Const. art. X, §4(a).http://www.leg.state.fl.us/statutes/index.cfm?submenu=3#A10S04
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