Florida’s homestead exemption on property taxes allows people who permanently live in the state to exempt up to $50,000 of a property’s value from tax assessments. This exemption isn’t available to investment properties, so homeowners who plan to rent their residence must meet several standards, including how long the property is rented for, to avoid losing the exemption.
Homeowners who avail themselves of Florida's homestead exemption can rent their property, only if they occupied it on January 1st of the year, and the rental does not span two consecutive years.
Florida Homestead Exemption
Florida’s homestead exemption applies to anyone who purchases a home and plans to make it his permanent residence, which Florida law defines as a residence the owner will use as his principal home with intent to return to it whenever he leaves.
Homeowners must apply to their county assessor for exemption by March 1 of the tax year for which they wish the exemption and may only claim the exemption if the property is their permanent residence or the permanent home of one of their dependents.
Abandonment Through Rental
According to the Miami-Dade Property Appraiser office, "Rental of all, or substantially all, of a home constitutes abandonment of the homestead exemption if the property is rented for more than 30 days for two consecutive calendar years." Because the exemption isn’t intended to provide investment property owners with tax relief, a home that’s converted from a residence into a rental property generally loses its homestead exemption.
The Broward County Property Appraiser states that, "If the rental begins after January 1 of a year (regardless of the shortness of the rental period) and there is a rental covering ANY part of the next consecutive year, that is an abandonment of the homestead under the law as of the second year. A seasonal rental (February-March) in two consecutive year would disqualify the property for homestead. Likewise, a one-time rental from December-February would also disqualify the property as it would involve portions of two consecutive years."
Active duty military personnel, however, are able to rent their property, and keep their homestead exemption, as long as they provide a copy of their military orders to the Property Appraiser.
Practical Application of Florida Laws
Florida law doesn’t heed how long a property is rented when it determines if the owner is entitled to the exemption. Instead, the only qualifiers are if the owner lives in the property on Jan. 1, applies for the exemption that year and does not rent the property across two calendar years.
Because of this, a “snowbird,” a property owner who lives in the state during the winter, can receive the homestead exemption every other year if he doesn’t remain in his home on a year-round basis, although he’ll need to be living in the property on Jan. 1 of the year he wishes to claim the exemption.
"Entire Dwelling" Provision
Florida law only withdraws the homestead exemption if the property owner rents the entire dwelling or a substantial portion of it. In previous decisions, such as Haddock v. Carmody, the court determined that merely leaving possessions in a locked closet doesn’t preserve the owner’s homestead exemption because of the “entire dwelling” construction of the law.
However, leaving a significant amount of personal property in locked rooms while renting out most of the property may establish intent to return to the property in defense of abandonment charges, according to the “Florida Bar Journal.”
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