8 Facts about Florida Homestead
Homestead laws in Florida can save you a lot on taxes each year, but only if you can sort through the complexity and actually apply for yourself. There’s a lot you need to know about Florida homesteads before you try to get your property approved as a homestead.
Things to know about Destin and South Walton Beach homestead
1. Only primary homes can be a homestead
If you have two homes, your Florida home must be your primary residence for you to make it a homestead. That means you cannot claim any sort of residency benefits from another state and must make Florida your permanent state of residence.
2. The longer you own the property, the better your tax savings can be
Your home’s value can only increase by a certain amount every year, whichever is lower between 3% and the Consumer Price Index the previous year. This means that your taxes can only increase by a limited amount from year to year, leaving you with a better rate than non-homestead properties or new properties.
3. Once your home is approved as a homestead, the status stays until you change it
After you apply and have your property accepted as a homestead property, it won’t revert back to a regular property unless a notice is sent to the county office to tell them it should lose homestead status.
4. Inheritance laws are more complex with a homestead
You may be restricted as far as who is allowed to inherit the homestead or not. If you’re preparing a will, have a will already prepared, or want to know more about what will happen with your homestead once you are deceased, you should discuss it with a local estate attorney to know your options and restrictions.
5. Your homestead property is protected from some forms of legal action
In most cases where a legal judgement is put against your assets to repay someone else, such as in a lawsuit, your homestead is exempt from your list of assets. Even in bankruptcy, having a homestead may help you keep your home or some of the equity when it would have been sold otherwise.
6. There is a limited time period for applying
You can only apply for homestead status between January 1st and March 1st. Applications are not accepted outside of this window each year.
7. Extra tax benefits can be gained if you qualify for an exemption
Certain extra exemptions are available for those such as widows, veterans, the disabled, and others. You can apply for these extra exemptions during the same time period as a homestead application.
8. Only certain types of organizations can qualify for a homestead property
Individuals are usually the ones with a homestead property, but some organizations can get the status as well. This is limited mostly to not-for-profit organizations including religious organizations, scientific and research organizations, literary organizations, educational organizations, and some charitable organizations.
It’s worth looking into it and finding out if your property is eligible to become a homestead property. There are quite a few benefits to this status, with the main one being the decrease in taxes you’ll owe on the property, but there are some trade-offs to consider as well. It’s good to know everything you can before you commit to the process.