Think of the word homestead and pioneering families heading west to settle the land likely come to mind. But in real estate, the word has a different meaning.
A homestead is your primary residence, which in many states is given an exemption from a portion of property taxes, or is even shielded from some liability. In the state of Florida, your homestead is also granted special treatment under probate law.
For your home to be designated as a homestead, it must be your primary residence. That means if you live in Florida only during the winter months, it can not be a homestead property.
A homestead designation doesn’t happen automatically. To qualify in any given year, you have to own the home as of January 1st of that year. Then you have to apply within the first few months to the county where you live, offering proof that you own the home and are a Florida resident. In Coral Springs, you can apply here. In Palm Beach county, apply here.
Here’s what having your home designated as a homestead in Florida will do for you:
- Protects you from creditors. If someone sues you for a money judgment and you lose, you can be forced to sell your assets to pay the judgment. If your home has the designation of the homestead, you cannot be forced to sell it. You also can’t be required to sell a homestead property to pay off other outstanding debts.
- Gives you a break from a portion of your real estate taxes. A complicated formula is used to exempt a portion of your home’s value from property taxes, but most homeowners save hundreds or thousands of dollars each year.
- Allows surviving spouse and minor children to have special treatment. When the person who owns a homestead dies in the state of Florida, the surviving spouse has legal rights to remain in the home, regardless of what’s in the person’s will.
- Shields the home from creditors during probate. After the homestead homeowner dies, creditors owed money by the estate cannot put a lien on the home.
Once you have a homestead designation, the county will continue to apply it each year. In the event you no longer qualify for a homestead–say you buy another primary residence and use your former home as a rental unit–the law requires you to notify the property appraiser’s office by March 1st of that year to remove the exemption. If you don’t do that, you can be subjected to hefty penalties.
If you move from one Florida residence to another, it is crucial that you apply for a homestead exemption, if not immediately, at least within two years of buying the new home. That’s because Florida’s Portability Law allows owners to transfer savings from the state’s property-tax-lowering “Save Our Homes” benefit from one homestead property to another within a two-year period. To qualify for that benefit, you have to submit a portability application along with your homestead application.
Having the Law Offices of Gary M. Landau by your side during each step in a real estate or probate matter helps insure that the process goes as smoothly as possible. The Law Office Of Gary Landau is rated 10 out of 10 by the legal website AVVO. For more information, call 954-979-6566 or email for a free consultation.