Tax exemptions are powerful tools to help reduce your tax burden – whether for income taxes or property taxes. In Florida, you can use the Florida homestead tax exemption to reduce your yearly property taxes.
Let’s talk about what the homestead exemption is and how to use it.
What is the Florida homestead exemption?
Florida created the homestead exemption to help homeowners reduce their annual property taxes. The amount of property taxes paid by homeowners varies by county. But the average is $1,752 – though some counties see an average property tax of $2,500.
The Florida homestead exemption provides a tax break on property taxes based on the home’s assessed value. With this exemption, a homeowner’s potential tax liability can be reduced up to $50,000.
The Florida homestead exemption also can protect a homeowner’s home from creditors. Currently, there is no limit on the value of the property for this protection. But depending on the county or city the property is in, there could be a limit to the amount of acreage protected.
Though the federal bankruptcy court can override this protection if the homestead was recently purchased.
How is the homestead exemption calculated?
Counties calculate property taxes as a percentage of the property’s assessed value. The homestead exemption reduces the taxes by lowering the property value used for assessment.
To do this, the Florida homestead exemption uses a tiered schedule.
A $25,000 exemption is applied for the first $50,000 of your property’s assessed value. If your property’s assessed value is between $50,000 and $75,000, an additional $25,000 exemption is applied.
The second $25,000 of the homestead exemption does not apply to school district taxes.
Here’s an example of how the homestead exemption works:
- Your property’s assessed value is $100,000.
- And you qualify for the full $50,000 exemption.
- Because of this, your property’s assessed value is $50,000 for all other property taxes.
- For school-related taxes, your home’s value is assessed at $75,000.
What are the rules or requirements for the Florida homestead tax exemption?
Here are the rules to qualify for the Florida homestead exemption:
- You are the property owner.
- The property must be your permanent residence. Or 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. So if you want to claim the exemption for 2022, you must have been living at the property on January 1, 2022.
- The property can not have been rented out for more than 30 days in any year.
How do I apply for a homestead in Florida?
To apply for a homestead in Florida, you need to fill out an application with your county’s property appraiser.
You can find a copy of the application here, and a list of the various county property appraisers here.
When should I apply for the homestead exemption?
Apply by March 1.
Late filing is allowed through early September, but the deadline varies. It will fall on the 25th day following the mailing of the Notices of Proposed Property Taxes – which are sent in mid-August.
Have questions? Let us know! We’ll direct you to the right resources.
Your Team at Liberty Title Company of America
