Understanding Florida's Homestead Exemption
When someone becomes a property owner in Florida, and makes it their permanent residence, the property owner may be eligible to receive a homestead exemption that would decrease the property’s taxable value. This is good financial news for individuals who choose to make Florida their home!
Of course, as with any government program, there are some intricacies with the homestead program and how it’s applied.
For the $50,000 exemption, the first $25,000 applies to all property taxes, including school district taxes. The additional $25,000 applies to the assessed value between $50,000 and $75,000 and only to non-school taxes.
Let’s take a look at an example of how this breaks down:
If your home is assessed at $45,000, the first $25,000 of value is exempt from all property tax and the remaining $20,000 of value is taxable.
If your home is assessed at $65,000, the first $25,000 of value is exempt from all property tax, the next $25,000 of value is taxable, and the remaining $15,000 of value is exempt from non-school taxes.
If your home is assessed at $85,000, the first $25,000 of value is exempt from all property tax, the next $25,000 of value is taxable, the third $25,000 of value is exempt from non-school taxes, and the remaining $10,000 of value is taxable.
Clear as mud?
The exemption qualifies the home for the Save Our Homes assessment limitation. The Save Our Home Benefit means that after the first year a home receives the homestead exemption, its assessed value for each following year cannot increase more than 3 percent.
The Florida Department of Revenue also has addition exemptions such as a widow or widowers exemption, disability exemption, blind persons exemptions and disabled veteran exemptions. These all have their own rules and eligibility requirements as well.
I’ve also found that many first-time Florida homeowners are surprised when their tax bills are higher than the tax bills of the previous owners. That’s because when the property changes ownership, Florida law requires the property appraiser to remove exemptions and reassess the property so the assessed value equals the just value.
Applications for all exemptions must be made between January 1 and March 1 of the tax year. Application can be made to the property appraiser’s office although online filing is the preferred method.
Between the homestead exemption and Florida’s 0% state income tax, there’s definite financial benefit to living in the Sunshine State.