Homestead Exemption

There are two major benefits to filing homestead exemption on your primary residence in Florida:

 

• • An ad valorem tax exemption on up to $50K of the property’s value

• • A limitation on how much the property appraiser’s assessed value can increase on a yearly basis

For those qualified for the standard exemption and sometimes additional exemptions, the savings can be significant. Don’t forget to FILE BY MARCH 1 if you purchased a new home as a primary residence in the previous year!

Keep in mind there are dangers for people filing homestead exemption on properties not considered a primary residence, such as those rented part of the year.

In addition to the standard exemption, some Floridians in a homestead may be eligible for further benefits such as:

 

• • Disabled persons, veterans, and first responders

• • Widows/widowers

• • Active-duty military

• • Seniors

• • Qualified owners who construct or reconstruct a portion of their property into living quarters for parents or grandparents—known as the “Granny Flat” exemption.

These discounts are explained and all applications can be found on the Brevard County Property Appraiser’s website: HERE.

For the standard exemption, the first $25,000 applies to all property taxes. To receive the full $25,000 additional homestead exemption, the property’s assessed value must be at least $75,000, and it applies only to non-school taxes.

Here’s where the big savings accumulate, though: The homestead exemption also qualifies residents for the Save Our Homes assessment limitation. Once a house is sold and qualifies for a new homestead exemption, the property appraiser assesses it at just value the same year. The assessment for each following year cannot increase by more than 3% or the percent change in the Consumer Price Index, whichever is less. This provides for a significant, cumulative discount for most people over the years of ownership because non-homestead assessment value increases are capped at a much higher rate of 10% per year.

During years when property values are increasing rapidly, so do taxes on non-homestead properties. A max 3% increase for the homestead sure beats a 10% increase per year. The accumulated value between the assessed value and the just market value is the Save Our Homes benefit. The longer a resident lives in a homestead residence, the greater the discount.

If you’re considering selling a house you’ve lived in for a long time and are concerned about giving up your accumulated discount, don’t worry. The Save Our Homes discount is portable to your new homestead property using this form at the time of filing homestead.

To transfer your Save Our Homes discount, you must establish a new homestead on or before January 1st of the third tax year after you abandoned your previous homestead. Portability lowers the tax assessment on the new residence; but be aware that the transfer of your personal discount takes until after March 1 of the following year to show up in the appraiser’s records, so your lender may temporarily refigure your escrow payment before your discount kicks in and your payment goes back down. This is sometimes an unwelcome surprise to buyers at the end of the year of purchase.

A note of caution for homestead residents who decide to rent a primary residence on AirBNB or Home Away for part of the year: be sure to check the statutes governing maintaining the homestead exemption in these cases: HERE. The property appraiser looks for homestead properties rented on these websites. Owners renting for more than the statutory limits can lose their exemption and assessment limitation and be responsible for paying back taxes with interest.

Although the property appraiser makes sure people filing homestead stay honest, the discounts are significant for qualified residents, so don’t forget to file by March 1 if you purchased a primary residence last year, because no one wants to pay unnecessary taxes!

Have any real estate questions? Ready to buy or sell a home in Brevard County? Let’s talk!