In Florida, the term “homestead” property gets tossed around often, but do you really know what homestead means? The goal of Florida homestead law is to protect Florida families. The Florida Constitution provides three different forms of homestead protection for Florida homeowners:
1. Asset protection from the forced sale of a home by creditors; 2. Save Our Homes (SOH) Exemption for real property taxes; and 3. Protection for spouses and minor children from property owners alienating or devising homestead property.
Asset Protection: The first form of homestead protection provides asset protection and prohibits the forced sale of homestead property by creditors to pay the homeowner’s debt. The Florida Constitution places limitations on what may be considered homestead property. The property must be located in the state of Florida. The property is further subject to certain acreage limitations, must be limited to the primary residence of the owner and/or his family, and must be owned by a natural person. Ownership of the real property on which a home sits is not necessary for homestead protection. “Any person owning and occupying any dwelling house, including a mobile home used as a residence, or modular home, on land not his or her own which he or she may lawfully possess, by lease or otherwise, and claiming such house, mobile home, or modular home as his or her homestead, shall be entitled to the exemption of such house, mobile home, or modular home from levy and sale as aforesaid.”
Save Our Homes Property Tax Exemption: The second form of homestead protection is commonly known as the Save Our Homes amendment to the Florida Constitution. It reduces the taxable value of homestead property by up to $25,000 and limits the increase in property tax valuation for homestead property. This limitation is a maximum of 3% annually or the percentage change in the Consumer Price Index (CPI) for all urban consumers, U.S. City Average, for the preceding calendar year as initially reported by the United States Department of Labor, Bureau of Labor Statistics, whichever is less. This type of homestead protection is governed by laws that are distinct from homestead asset protection. While the Save Our Homes exemption protects existing homeowners, including seniors on fixed incomes, from large property tax increases, the end result is often that neighbors in similar homes may pay very different property tax rates. This is particularly true if one homeowner is a long time permanent resident with homestead protection, while the other is a new seasonal resident who paid a higher purchase price for the same home. Home buyers are advised to keep this potential disparity in mind, as the current owner’s property taxes may bear little resemblance to what the new buyer will actually pay for the same property.
Protection for spouses and minor children: The third form pertains to how homestead property is devised to surviving heirs. In Probate matters, homestead property passes directly to the designated heir or heirs without becoming part of the decedent’s estate, as long as the beneficiary is legally entitled to the benefit of homestead protection. “The homestead shall not be subject to devise if the owner is survived by a spouse or a minor child or minor children, except that the homestead may be devised to the owner’s spouse if there is no minor child or minor children.” The subject property must be owned by the decedent at the time of his death to qualify as homestead property. Homestead property may not be devised to another party by a married owner without joinder or consent of his or her spouse. We are happy to answer any questions you may have regarding homestead issues. Please contact Boatman Ricci at (239) 330-1494 for a consultation.
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