Property taxes are levied by cities, counties, school districts, and independent special districts. How much property tax you pay is determined by: 1) The property tax rates that local government charges, and 2) The taxable value of your property (the value you pay tax on, after limitations and exemptions). The property tax rate is called the “millage rate” and is expressed in “mills.” A mill is $1 per $1000 of property value. Therefore, for example, a millage rate of 15 mills would mean you would pay $1500 per $100,000 of the property’s taxable value. This article will discuss the exemptions and limitations which lower your taxable value.
Florida’s Homestead exemption dates back to The Great Depression, which began in 1929. As the Depression deepened, many Florida property owners found themselves unable to pay their property taxes and in serious danger of losing their homes. In response to this serious problem, State Representative Dwight Rogers of Fort Lauderdale in 1933 proposed and successfully passed legislation to place the $5,000 Homestead Exemption Amendment on the state ballot. Florida’s voters overwhelmingly approved the Homestead Exemption Amendment in 1934. The initial Homestead Exemption sought to ease the burden on homeowners by exempting property taxes on the first $5,000 of a homeowner’s residence. The exemption was increased by the Florida Legislature by statute to $10,000 during the 1960s. By Constitutional amendment adopted by a landslide in 1980, the exemption was increased to $25,000. On Jan. 29, 2008, voters approved an amendment to the Florida Constitution raising this exemption to $50,000.
Florida law entitles every person who has legal or equitable title to real estate and maintains it as his/her permanent residence, to a $50,000 homestead property tax exemption or a percentage thereof if the ownership interest is less than 100%. Such exemption does not automatically transfer to a new residence if you move. In accordance with State law, a new application is required if you move, or if you change title on your deed in any way, including deeding your property to a trust. Check out blog post on USDA loan rates eligibility.
When you apply for Homestead Exemption, you must have legal and equitable title to your property, and as of JANUARY 1st, have established residency thereon; and you must file the application for Homestead Exemption at the Property Appraiser’s office on or before MARCH 1ST. Also, Chapter 196, Florida Statutes, specifies that when homestead property is sold or there is a change in title to homestead property, a new application is required regardless of the reason (divorce, transfers to avoid probate, transfers to trusts, etc.). Furthermore, property transfers to family members to avoid probate of an estate may result in loss of all or part of the homestead exemption. Consultation with your attorney is recommended prior to proceeding with these types of changes.
Applications may be filed at any time on or before the annual deadline of March 1st, at the Property Appraiser’s office in your county. The Property Appraiser will automatically renew your Homestead Exemption each year and send a Homestead Exemption card to you in the mail as notification of the renewal. The Homestead Exemption does not transfer from property to property. If you had this exemption last year on another property and moved, you must file a new application for your new residence. You must also notify the Property Appraiser to cancel the exemptions on your former home. Property purchased during last year may show qualified exemptions of the seller. The sellers’ exemptions will not carry over to the next year; you must apply for your own exemptions.
There are other exemptions, which vary from $500 to a total exemption. Some depend on income status and require an annual filing. They include exemptions for the blind, widows and widowers, qualified senior citizens, disabled persons and veterans. There is also the “Granny Fats” exemption for improvements done for the care of a parent or grandparent. In Jacksonville, there is also a historical amenities exemption for renovations to qualified structures in historic neighborhoods. Study pros and cons of umbrella companies and enjoy the ‘tax efficient’ way of keeping more of your income by reducing your tax liability.
In 1992, the Florida Constitution was amended to limit the annual increases in the assessed value of property receiving the homestead exemption to 3% or the percentage change in the Consumer Price Index, whichever is lower. This assessment limitation is commonly referred to as the “Save Our Homes” or “SOH” Cap. Exceptions to that limitation include new additions or construction that escaped taxation in the past. Another exception would occur when a homestead property sells: the assessed value returns to fair market value in the year following the sale. That fair market value assessment then becomes the base value for “Save Our Homes” purpose for the new owner/homestead applicant. Florida property tax homestead exemption reduces the value of a home for assessment of property taxes by $50,000, so a home that was actually worth $100,000 would be taxed as though it was worth only $50,000. However, the second $25,000 of homestead coverage does not apply to the school portion of property taxes — and only applies to the third $25,000 of a property’s total just value (i.e., that portion of a property’s value between $50,000 and $75,000).
Florida voters overwhelmingly approved a new constitutional amendment in January 2008, which grants added tax relief to property owners. The amendment gives homesteaded owners the “portability” right to move Save Our Homes benefits to a new homesteaded property. If you had homestead on one Florida property in 2007 (or later) and are now seeking to move your homestead to a different property for 2009, some or all of the difference between your old homestead’s assessed value and its market value can be applied to the assessment of your new home immediately. How much of the difference between assessed and market value (“Save Our Homes difference”) can be applied depends on how the value of your new home compares to the value of your old home. Portability provides for the transfer of accumulated Save Our Homes benefit (up to $500,000) to a new homestead within one year and not more than two years of relinquishing the previous homestead.
The Voters passed Amendments 9 and 11 in November 2012. Amendment 9 authorized the legislature to totally or partially exempt surviving spouses of military veterans or first responders who died in the line of duty from paying property taxes.
Amendment 11 authorizes counties to grant full homestead property tax relief to low-income seniors who have lived in their home for at least 25 years. In short, it would eliminate the entire property tax bill for qualifying seniors. Homeowners who meet the following requirements would be eligible: 1) aged 65 and older 2) have a household income of less than $27,030 3) own a home with a market value of less than $250,000 4) have lived in the home for at least 25 years. Please contact your Property Appraiser for details on these two new amendments.
All of these exemptions and limitations add up to real property tax savings for you. So if you have not filed for your exemptions, make it your New Year’s resolution to visit your property appraiser’s office and give yourself the gift of tax savings.