Congratulations! You’re a first-time home owner in Miami, FL and you’re settling into your new place. The first year of home ownership brings many changes – new commute to work, new paint on the walls, and remodeling the bathroom. It’s an exciting time as you make your house a home, and start a new chapter in life while building personal equity. But one thing that could get lost in transition is remembering to file for your Florida Homestead Exemption. Not filing for a Homestead Exemption will likely cost you money.
What is a Homestead Exemption?
A Homestead Exemption accomplishes three main things — it reduces your property tax bill, protects you from creditors, and protects a surviving spouse when the other home owner dies.
How can you claim your Homestead Exemption?
In Florida you have to claim a Homestead Exemption – that is, it is not automatic. In Miami-Dade county, you can claim your exemption online on the Miami-Dade Property Appraiser website.
Reduce your taxes with a Homestead Exemption
Florida allows up to $50,000 in Homestead Exemption for married couples on their primary residence. It’s $25,000 for single home owners. Consequently, this reduces the value of your home for the assessment of property taxes. The assessed value is almost always less than the fair market value of your home. For example, if the home of a married couple is worth $400,000, property owners who claim a Homestead Exemption are assessed a home value of $350,000. Your real estate tax will only be levied against the $350,000. Additionally, claiming your exemption qualifies home owners for additional benefits under the Save Our Homes amendment in Florida. To estimate your property taxes, the Miami-Dade Tax Appraiser has a helpful calculator on their website.
Protection from creditors
Claiming a Homestead Exemption protects you and your family from creditors, such as a judgement against you to repay an outstanding loan. If creditors have a claim against you, they cannot force the sale of your primary residence to satisfy payment of the debt. In other words, you won’t go homeless in Florida to satisfy creditors looking to get repaid. This Florida law doesn’t necessarily apply if the judgement against you pertains to mortgage payments or unpaid property taxes. If this is your situation, consult with an attorney about your options.
Does a surviving spouse get to keep the Homestead Exemption?
Don’t assume that a Homestead Exemption is not affected after the death of a spouse. Homestead Florida laws are tricky when there is a death and possible distribution. The answer is different depending on whether there are minor children, whether there was a prenuptial agreement, etc. We strongly recommend discussing the topic of your Homestead Exemption with an estate planning attorney.
Qualifications to get an exemption in Florida
- Own the property
- It must be your permanent residence “to the exclusion of all others”
- The residence must be in your name as of January 1st of the year you seek the exemption.
If you satisfy the above points, you must apply by March 1st to get the Homestead Exemption for that year.
Hope you’ve found this information helpful!
Jonathan G. Cameron is a CERTIFIED FINANCIAL PLANNER™ professional and co-founder of CameronDowning, a Registered Investment Advisory Firm in Miami, FL. Please connect with us on LinkedIn, Facebook, and Twitter. Also, check out the rest of the CameronDowning website as well as our YouTube channel where we’ve created dozens of short videos answering many of your personal financial questions.