It’s time for what I consider to be one of the most important homeowner tips if you’re buying a home in Florida for the first time! When talking about real estate in Miami and the surrounding areas, one important topic that doesn’t get enough attention is the homestead exemption. As a homeowner in the Sunshine State, knowing about the Florida homestead exemption can help you to pay much less in property taxes over your lifetime. Here’s the knowledge I want you to walk away with today the 4 main topics:
- How to file for homestead exemption in Florida.
- How much the homestead exemption will save you.
- Where to file homestead exemption in Florida.
- How a homestead exemption protects you.
Most importantly, I’m going to help make sure you’re able to file your Florida homestead exemption during the very small window that’s provided to Florida property owners. Yes, you have just a two-month period out of the whole year to get this done! Let’s not waste another minute. Here’s how to file for homestead exemption on your Florida home!
What Is a Homestead Exemption?
The simplest way to describe a homestead exemption is to call it a break on your property taxes if your property is your permanent residence. A homestead exemption allows you to exclude a portion of your home’s value from the assessment for the purpose of lowering real estate taxes. Homestead exemptions by state vary quite a bit. For instance, Florida will allow you to receive a homestead exemption if a property is the permanent residence of your dependent(s) even if you don’t live there on a full-time basis. The big thing to know is that a homestead exemption is not automatically applied to your property. You’ll need to complete your paperwork for the Florida homestead exemption in time to enjoy this nice tax break for the upcoming year if you just purchased a new home.
How Much Will Homestead Exemption Save Me When I Move to Florida?
How much is my homestead exemption? The answer will depend on the assessed value of your new home. The homestead exemption in Florida for all qualifying residents is up to $50,000. This $50,000 exemption is actually divided into two parts. The first is an exemption of up to $25,000 that applies to all property taxes. This first portion of $25,000 also includes your school district taxes. Next, there’s an exemption up to $25,000 that applies only for non-school taxes. The amount of real estate taxes you’ll owe can be determined by simply looking at the difference between your home’s assessed value and the available exemption. Here’s a sample house:
- The home in Florida is valued at $200,000.
- Your Florida homestead exemption is $50,000.
- You will subtract $50,000 from $200,000 to get $150,000.
- You are only responsible to pay real estate taxes on $150,000.
There’s a little extra if you happen to be age 65 or over. For seniors who qualify for the Florida homestead exemption, there is an extra break up to $50,000. You may also qualify for the following exemptions:
- $5,000 for disabled veteran.
- $500 for widow/widower.
- $500 for disability.
- $500 for blind persons.
The amount that you save from a Florida homestead exemption will ultimately depend on the taxable value of your home. However, the average homeowner stands to save several hundred dollars per year for essentially doing nothing! If you’re buying a first home in Florida, it’s foolish to leave this deal on the table. However, you do need to make sure that you can get all of your paperwork in for the current year to take advantage of this break on your property taxes before Florida’s tiny window for applications closes. Let’s talk about how to do that right now.
How to Apply for the Florida Homestead Exemption
To apply for the Florida homestead exemption, you’ll need to complete something called Form DR501. You’ll just need to supply some basic information to begin. These are the core things for confirming eligibility on your application:
- Whose name appears on the title for the property on Jan. 1 of the current year?
- What is your Social Security number?
- What is the street address of the property?
- Were you (or a dependent) living in the property on Jan. 1 of this year?
- Are you a legal Florida resident?
- Do you have a Florida driver’s license?
- Do you have a Florida license plate on your car?
- Do you have residency in another state or country?
The good news is that you don’t have to worry about renewing your property tax exemption every year! You’ll be eligible for automatic renewal once you get in your application as long as there are no changes to your eligibility. Of course, you may be wondering exactly where to file homestead paperwork. All applications should be sent to the property appraiser’s office in your county. I want to prepare you for the fact that different county appraisers might ask for different things during the application process. Here’s what’s on the complete list of things your county appraiser could ask you for:
- Proof of the last address listed on your IRS tax return.
- Your Florida driver’s license or identification card number.
- Proof that you’ve given up a driver’s license in another state.
- Proof of end date for your previous residency outside Florida.
- Your Florida license plate number.
- Your voter registration number.
- The name of your current employer.
- The location of your dependent(s).
- Proof of bank statement/bank account mailing address.
- Proof of utility payments at your Florida address.
While all of this information is important, nothing I’ve shared so far is quite as important as this next part. Florida has a very small window for submitting your homestead exemption application. All applications for exemptions must be submitted between Jan. 1 and March 1 of the tax year you’re seeking your real estate tax exemption for! Unfortunately, the county appraiser considers you as having waived your exemption privilege for the year if you don’t get your application in by March.
How to File Homestead Exemption Florida Protects You
You should have a good idea of why the homestead exemption Florida residents can take advantage of is worth your attention if you like the idea of paying less for property taxes after you buy a house. However, I still want to touch on another point that’s really important. The homestead exemption is protecting you from rising property values. What this means is that your property taxes won’t rise at the same rate as your home’s value. Your home gaining in value is a very likely scenario based on what we see happening in the Florida market today.
Most of us get excited when the value of our home goes up because it means our investment is paying off! We begin to imagine using the home to obtain an equity loan, help start a business or fund our retirement. Many of us also dream about being able to leave a home worth significantly more than what we paid for it to our children. However, there is always that fear that property taxes will rise as our home value rises. Homestead laws help to protect us from that by effectively capping the portion of our home’s full value that can be taxed.
There’s also one more very special protection offered by homestead laws in Florida. Homestead property is exempted from levies and creditors in the Sunshine State. That means a creditor cannot force the sale of your home to satisfy a debt judgment. While you may not be concerned about that right now, it’s an added source of peace of mind that Florida homeowners get to enjoy!
I’m always happy to tell you more about what is homestead exemption if you’re interested to learn exactly how much of your property taxes would be erased after you buy your new home. Let’s get some numbers down on paper to see what Florida’s homestead exemption means for people looking for real estate in Miami and the surrounding area right now! Contact me today! take care beautiful people, God Bless you.
