Avoid the Trap!



Authored By: Scott W. Dunlap, Esq. sdunlap@dunlapmoran.com  

For those of you who already have the homestead tax exemption on your primary Florida residence, you may have recently received a yearly receipt card for the exemption renewal. 

As a reminder, the renewal card provides, in part, that your homestead exemption will be automatically renewed without any further action if the property is still the taxpayer’s primary residence.  Common examples of the property no longer qualifying as a primary residence include the renting of the property, property owner moving to another residence or to an assisted living facility, or the property owner benefitting from a residency-based exemption in another state (the “Trap”). 

The Trap, which was the subject of a recent Sarasota County lawsuit, relates to Section 196.031(5), Florida Statutes, which provides, in part, that a person who is receiving or claiming the benefit of an ad valorem tax exemption or tax credit in another state, where permanent residency is required as a basis for such exemption, is not entitled to the Florida homestead exemption.  This provision is a trap for the unwary, as the recent case in Sarasota County involved a couple from Ohio, who never even applied for such exemption on their Ohio home, and had no knowledge that the permanent residency-based exemption for their Ohio home even existed.  The Sarasota County Property Appraiser became aware of the fact, and revoked the Florida homestead exemption, and exacted various penalties, back taxes and interest.  The benefit that was received in Ohio was in the neighborhood of $500.00, but the back taxes, penalties, and the like collected in the lawsuit in Sarasota County, was in excess of $10,000.00!

The result in the above-referenced case was very harsh, and the court recognized this fact.  Based on the case and similar cases, the Florida Legislature is considering modifying the homestead statute to provide that the aggrieved person or family has a chance to demonstrate to the property appraiser that the person or family did not apply for the exemption or credit and that upon becoming aware, the person or family has relinquished the exemption or credit in the other state.  Said law may or may not pass.

In summary, if you are entitled to the homestead exemption, by all means timely apply for and claim this valuable Florida benefit.  However, if you later are no longer entitled to the exemption, you must notify the local property appraiser, as there are severe penalties that can apply if the homestead exemption is renewed but the property owner does not qualify for the continuance of the homestead exemption.   Note that not all counties mail a homestead renewal notice, so this may require the owner to be even more proactive.  And in particular if you are a new Florida resident, make doubly sure that you are not receiving any sort of homestead exemption or exemption based on permanent residency in your prior state of residency, so that you avoid the Trap.

This blog is intended for informational purposes only and it is not intended to be, nor should it be construed as, legal advice or legal opinion.  The reader should not consider this information to be an invitation to an attorney/client relationship, should not rely on information presented here for any purpose, and should always seek the legal advice of counsel in the appropriate jurisdiction.