Florida Homestead Tips and Traps - Part 2
The following are tips and traps related to applying for and maintaining
homestead on a Florida primary residence:
Review and File for all Qualified Exemptions: The homestead exemption is the most well-known of the Florida exemptions
available to residents, however, it is not the only exemption available.
When filing for homestead, make sure that all available exemptions are
applied for and utilized. For example, if an individual has recently lost
their spouse, they may qualify for the widow or widower exemption. Individuals
who are partially or totally disabled may receive an exemption to reduce
the real property taxes owed on their primary residence. Other exemptions
include: disabled Veterans, individuals who are blind, senior citizens
with low income, deployed military personnel, combat-wounded Florida disabled
Veterans, and totally and permanently disabled first responders. These
additional exemptions may be combined with the regular homestead exemption
and/or each other (as applicable). Any additional exemptions should be
applied for at the same time as the homestead application is submitted.
Also keep in mind that certain additional exemptions do require extra
documentation to prove a resident is qualified to receive such additional
exemption(s). Finally, in the case of changed circumstances, a homestead
owner may apply for any such additional exemptions when they become qualified.
Follow the Deadlines: The deadline to file homestead is March 1stof each respective year that a homeowner intends to claim homestead, provided
that the subject real property was the homestead of the Florida resident
as of the first day of such year. Filing by the March 1st deadline is extremely important, however, in some circumstances a late
homestead exemption filing may be accepted. In such case, a homeowner
is usually required to provide “cause” or reasons for the
late filing. The late filing should be submitted by September of the same
year as the missed deadline and generally such late filings are accepted.
In more limited cases, a filing beyond September may be accepted with
the payment of a late fee (in the discretion of the Property Appraiser’s
office in the respective homestead county).
Homestead CANNOT be Inherited: One common misconception about homestead, due to its dynamic function,
is that homestead can be inherited by the individual receiving the property
after a homestead owner dies. This misconception is usually shattered
when the homestead property’s heir receives a tax bill in the year
following the homestead owner’s death. Of course, there is an exception
for married couples where the homestead continues for the benefit of the
surviving spouse if such spouse has the beneficial interest for life in
the homestead property. In some instances, excluding transfers to spouses
having a beneficial interest for life, the loss of homestead can lead
to a tremendous increase in the real property taxes for such property,
especially if the property has been homesteaded for a very long time.
A useful strategy in such case would be to estimate the increase in taxes
and if such increase is not affordable by the heir, the heir should plan
to sell such residence before any such increased taxes become due (typically,
Renting Homestead Property :Renting any property declared as homestead is not recommended and should
be avoided. The homestead is the primary residence of the property owner
and not a business entity, therefore, any indication of rental provides
evidence that the property owner is not actually residing in the property
as their primary residence. If necessary, although discouraged, any rental
must be as minimal as possible and only be “incidental” and
not a regular occurrence.
The Qualified Personal Residence Trust (QPRT) and Homestead: The QPRT is an Estate Tax reduction strategy that distributes an individual’s
primary residence to another person after a number of years using an Irrevocable
Trust, the QPRT. In such instance, the original property owner should
retain a long term lease (for example, a ninety-nine (99) year lease)
from the QPRT remainder beneficiaries in order to not disqualify the original
owner’s homestead on the Property. If such lease is retained, then
homestead should continue uninterrupted.
Contact The Presser Law Firm, P.A. for a complimentary consultation to
learn more about Asset Protection, Business Law, Estate Planning, and/or
any other legal needs that you may have.
The Presser Law Firm, P.A.
6199 N. Federal Highway, Boca Raton FL 33487
(561) 953-1050 or e-mail Info@AssetProtectionAttorneys.com