What Is Homestead Exemption?

Florida property tax homestead exemption reduces the value of a home for assessment of property taxes by $25,000, so a home that was actually worth $100,000 would be taxed as though it was worth only $75,000. Additionally, the Florida homestead exemption caps the rate at which property taxes may be increased. Though millage rates may be changed, the assessed value a house with a homestead exemption can be increased by is fixed. This is the result of the “Save Our Homes” Amendment to the Florida Constitution which was passed by voters in 1992, and went into effect in 1995. The amendment caps the increase of the assessed value of a home with a homestead exemption to the lesser of 3% or the rate of inflation.

Homestead exemptions are only available on an individual’s primary home. Therefore, this exemption does not apply to businesses, rental property, second homes, or homes with owners that do not claim Florida as their primary residence.
 
Documentation required for all owners filing for exemption

When you apply for Homestead Exemption, you must have legal and equitable title to your property, 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; and when making your application, the following documents and information must be provided:
                        Florida Driver's License 
                        Florida Vehicle Registration 
                        Voter Registration Card
                        Social Security Number 
                        A copy of your recorded deed or tax bill

Additional Exemptions:
        $500 Widow/Widower Exemption
        $500 Disability Exemption Application 
        $5,000 Veteran's Disability Exemption

When do you apply?
 
The normal filing time for homestead exemption begins on January 1 and lasts through March 1.  All exemption applications for that year must be filed by March 1.  You may pre-file for the following year from March 2 through December 31, which is advisable to avoid waiting in line. Failure to apply on or before March 1, according to Florida law, is a waiver of the exemption privilege for that year.

What if You Miss the March 1, Filing Deadline?

If extenuating circumstances prevented your filing an application for homestead exemption during the statutory filing period of January 1 to March 1, of the current year, you may file an application late along with a petition to the Value Adjustment Board.   The forms are available at any county tax office:

Protection from Creditors

The homestead exemption offers virtually absolute protection from forced sale to meet the demands of creditors, except under four special circumstances listed below.  One unique feature of Florida's homestead exemption is that it attaches to proceeds from the sale of a home, if the homeowner intends to use those proceeds to establish a new Florida homestead within a reasonable time. Therefore, if the owner of a $1,000,000 home sells that home and puts the money in a bank account, that money is still protected by the homestead exemption, so long as the homeowner has a bona fide intent to use it to purchase another home in Florida entitled to the exemption within a reasonable period of time. This protection is lost if the funds are commingled with other funds not designated for such a purchase. Also, the protection only extends to the amount the owner intends to invest in a new homestead - if the owner of a $1,000,000 home sells that home, and makes clear his intent to purchase a $750,000 home, the remaining $250,000 will lose its protection.

Exceptions for Certain Creditors
Four types of creditors can still force the sale of a homestead to collect debts owed to them. These are:

    1.The State of Florida and its counties or municipalities, to collect past due property taxes;
    2. Parties to whom the property was specifically pledged as credit for a mortgage;
    3. Mechanics who are owed money for work performed in repairing or improving the property.
    4. Federal income tax liens are superior to the homestead protection provided by the Florida Constitution. The Internal Revenue Service's policy is reluctant to foreclose on taxpayer's homes to enforce these liens, often only getting satisfied if the real property is sold or mortgaged before the tax lien expires.