Why Changes to the Homestead Exemption May be on the Way

Why Changes to the Homestead Exemption May be on the Way

During the last Florida legislative session, two bills, House Bill 369 and Senate Bill 148, were introduced proposing that a constitutional referendum go on the November ballot. The amendment would add a year to the time period a homeowner would have to transfer certain accumulated benefits to get a property value assessment cap on their new residence. Here is more on the status of the bills and the potential changes to this Florida property exemption.

Save Our Homes

In Florida, the Save Our Homes benefit was created by an amendment to the Florida constitution and limits the growth of tax assessments on homestead exempted properties to three percent a year. Save Our Homes also allows homeowners to carry the reduction in their assessment, up to $500,000, from one home to another through something called portability.  However, under current Florida law, a homeowner must have “received a homestead exemption as of Jan. 1 of either of the two immediately preceding years” to transfer his or her Save Our Homes benefits from one home to the next. If a property is acquired after the established two-year timeframe, homestead will not be established, and the portability will be lost.

Portability Problems

Problems with the portability of the homestead exemption can arise when a homeowner is waiting for a property to be ready and an unexpected problem arises. For example, one family reportedly encountered an issue after selling their home in 2013 while waiting for their new home to be built. When their builder took longer than expected, the family pitched a tent in the new home’s yard in an attempt to establish residency and homestead before the portability date expired. The local tax assessor did not believe camping was enough to establish homestead and portability was denied. As a result, the taxes on their new home ended up being approximately $5,200 per year. Some contend that homestead is not uniformly defined or applied and that the exemption would have been granted in another county. The family continues to challenge the result in Florida’s courts, but so far have been unsuccessful.

Florida Sen. Jeff Brandes, R-St. Petersburg, and Rep. Rick Roth, R-West Palm Beach proposed the bills necessary to allow citizens to vote on a constitutional amendment that would extend the period to transfer the Save Our Homes homestead benefit to three years. The proposed laws received the necessary legislative support to be added to the ballot in November. If 60 percent of Florida voters approve the amendment at a statewide referendum on Nov. 3, it will pass and take effect on January 1, 2021.

At Rabideau Klein, Guy Rabideau, Esq. and David E. Klein, Esq. are Florida Board-Certified Real Estate Attorneys with experience assisting clients with their residential real estate matters in the Town of Palm Beach.  We have the expertise and local knowledge you need to evaluate and protect your interest during your Palm Beach County real estate transaction.  Contact Rabideau Klein today to discuss your legal real estate needs.

 

 

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