The term homestead as used in Florida is one of the more confusing and complicated legal concepts which exist. When a typical citizen of Florida thinks of homestead, they think of the tax exemptions provided, while most lawyers think of the protections from forced sale of residences by creditors.
The Florida Constitution protects it’s citizens using homestead in three (3) distinct ways:
- the Constitution provides an exemption from the taxation on portions of the value of our homestead with an exemption from those taxes. Article VII, Section 6
The Florida Department of Revenue has a brief and informative web page available (http://dor.myflorida.com/dor/property/taxpayers/exemptions.html) to assist you with determining the exemptions from taxation related to your homestead which may be available for your benefit. Your local Property Appraiser has the specific information and forms necessary to make your application to be eligible for a Homestead Tax Exemption. In Palm Beach County that web page is http://www.pbcgov.com/papa/AdValoremTaxExemption.htm.
- the Constitution protects the homestead from forced sale by creditors. Article X, Section 4
This is a major area of litigation in Florida, and a reason many choose Florida as a haven to protect their assets. Generally, creditors who are not involved in the improvement of your homestead, and who did not loan you money to purchase your homestead are precluded from ordering a forced sale of your home to pay a debt that may be owed.What makes up your homestead, the definition of homestead, a determination of the status of the creditor, and who is eligible for the protection are complicated legal determinations that should only be addressed on an individual basis with counsel of your choosing.
- the Constitution restricts an owners ability to alienate, transfer, devise or sell the homestead. Article X, Section 4
Another complicated and involved legal area concerns the ability of an owner of property to sell, transfer, or devise the homestead to anyone without the permission of their spouse, or consideration of their dependants. This may apply even though the homestead is in only one spouses name. A resolution of these issues requires competent legal advice.
The specific Florida Constitutional provisions referred to are set for the below for your review.
ARTICLE VII, SECTION 6. Homestead exemptions.
- Every person who has the legal or equitable title to real estate and maintains thereon the permanent residence of the owner, or another legally or naturally dependent upon the owner, shall be exempt from taxation thereon, except assessments for special benefits, up to the assessed valuation of twenty-five thousand dollars and, for all levies other than school district levies, on the assessed valuation greater than fifty thousand dollars and up to seventy-five thousand dollars, upon establishment of right thereto in the manner prescribed by law. The real estate may be held by legal or equitable title, by the entireties, jointly, in common, as a condominium, or indirectly by stock ownership or membership representing the owner’s or member’s proprietary interest in a corporation owning a fee or a leasehold initially in excess of ninety-eight years. The exemption shall not apply with respect to any assessment roll until such roll is first determined to be in compliance with the provisions of section 4 by a state agency designated by general law. This exemption is repealed on the effective date of any amendment to this Article which provides for the assessment of homestead property at less than just value.
- Not more than one exemption shall be allowed any individual or family unit or with respect to any residential unit. No exemption shall exceed the value of the real estate assessable to the owner or, in case of ownership through stock or membership in a corporation, the value of the proportion which the interest in the corporation bears to the assessed value of the property.
- By general law and subject to conditions specified therein, the Legislature may provide to renters, who are permanent residents, ad valorem tax relief on all ad valorem tax levies. Such ad valorem tax relief shall be in the form and amount established by general law.
- The legislature may, by general law, allow counties or municipalities, for the purpose of their respective tax levies and subject to the provisions of general law, to grant an additional homestead tax exemption not exceeding fifty thousand dollars to any person who has the legal or equitable title to real estate and maintains thereon the permanent residence of the owner and who has attained age sixty-five and whose household income, as defined by general law, does not exceed twenty thousand dollars. The general law must allow counties and municipalities to grant this additional exemption, within the limits prescribed in this subsection, by ordinance adopted in the manner prescribed by general law, and must provide for the periodic adjustment of the income limitation prescribed in this subsection for changes in the cost of living.
- Each veteran who is age 65 or older who is partially or totally permanently disabled shall receive a discount from the amount of the ad valorem tax otherwise owed on homestead property the veteran owns and resides in if the disability was combat related, the veteran was a resident of this state at the time of entering the military service of the United States, and the veteran was honorably discharged upon separation from military service. The discount shall be in a percentage equal to the percentage of the veteran’s permanent, service-connected disability as determined by the United States Department of Veterans Affairs. To qualify for the discount granted by this subsection, an applicant must submit to the county property appraiser, by March 1, proof of residency at the time of entering military service, an official letter from the United States Department of Veterans Affairs stating the percentage of the veteran’s service-connected disability and such evidence that reasonably identifies the disability as combat related, and a copy of the veteran’s honorable discharge. If the property appraiser denies the request for a discount, the appraiser must notify the applicant in writing of the reasons for the denial, and the veteran may reapply. The Legislature may, by general law, waive the annual application requirement in subsequent years. This subsection shall take effect December 7, 2006, is self-executing, and does not require implementing legislation.
ARTICLE X, SECTION 4 Homestead; exemptions.
- There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person:
- a homestead, if located outside a municipality, to the extent of one hundred sixty acres of contiguous land and improvements thereon, which shall not be reduced without the owner’s consent by reason of subsequent inclusion in a municipality; or if located within a municipality, to the extent of one-half acre of contiguous land, upon which the exemption shall be limited to the residence of the owner or the owner’s family;
- personal property to the value of one thousand dollars.
- These exemptions shall inure to the surviving spouse or heirs of the owner.
- The homestead shall not be subject to devise if the owner is survived by spouse or minor child, except the homestead may be devised to the owner’s spouse if there be no minor child. The owner of homestead real estate, joined by the spouse if married, may alienate the homestead by mortgage, sale or gift and, if married, may by deed transfer the title to an estate by the entirety with the spouse. If the owner or spouse is incompetent, the method of alienation or encumbrance shall be as provided by law.