Florida Property Tax Exemption: Benefits of Purchasing a Primary Residence in Miami Beach, FL!

What Exactly is the Florida Property Tax Exemption?

When purchasing a primary residence in Miami Beach, find out how you may qualify for a Florida Property Tax Exemption called the Homestead Exemption.

What is the Florida Homestead Tax Exemption and how do I obtain the tax exemption status?

The Florida Homestead Tax Exemption was created to make owning a home in Florida more affordable and to encourage more people to invest in home ownership.  If you live in a residence for six months and one day, then it is considered your primary residence. At that point, you can apply for the Homestead Tax Exemption status.  Addressed below are the list of the tax-exempt benefits.

The process is very simple.  Fill out a form online including your warranty deed and utility bills in your name.  Once you are approved for the Homestead Tax Exemption Status, you do not have to do anything to maintain the status.  Each year, you will receive a letter in the mail from the Miami-Dade County office verifying that you still live at the address.  March 1st is the deadline for this year.  

What are the benefits of using the Florida Homestead Tax Exemption?

The benefits of the Florida Homestead Tax Exempted status can be substantial.  We recommend to each one of our real estate clients that they take advantage of this simple process!

1. An advantage of a $50,000 exemption off the tax assessed property value can equal approximately $1,000 off your annual taxes.

2. A cap on how much your property assessed value can increase year over year can be staggering. This is called the Save Our Homes cap. For example, if you home value doubles in a year, the maximum your property taxes can rise is 3% per year.

3. This is a great way to protect your asset from creditors. Creditors cannot take away your homestead. Creditors are only allowed to put a lien on the homestead.

When does the Homestead Tax Exemption not apply in Florida?

If you do not meet the Florida property tax exemption qualifications, you could be committing homestead fraud. Below are some situations where that may apply.  

1. If the property is rented for greater than 30 days in two consecutive years. This also includes renting part of the home, like one bedroom. If you rent part of the primary residence, you may lose a portion of your tax-exempt status.

2. If the property is not the permanent residence of the original applicant.

3. If the spouse of the original applicant has an exemption on another property.

4. If the original applicant receives a permanent residency benefit or tax credit in another state or Puerto Rico.

5. If the original applicant passed away.

6. If the property ownership was transferred, but it was not recorded with the Clerk of Courts.

Not abiding by these requirements can lead to fines of up to ten years of back taxes, penalties and interest.  It is important to keep up with the state and county law and taxes changes to ensure you are following the laws and maximizing your benefit. Of course, make sure you are using a local Floridian real estate expert when you get advice.

What other types of tax exemptions are available in Miami-Dade County, FL?

Do your research to find out if you also qualify for other types of Florida Homestead Tax Exemptions like:   

1. Senior Citizen Exemption

2. Widowed Exemption

3. Civilian Disability Exemption

4. Veteran Disability Exemption

5. Deployed Military Exemption

6. Assessment Reduction for Living Quarters of Parents or Grandparents or more commonly called the “Granny Flat Exemption.”

How does this tax exemption affect the home buying and selling process in Miami Beach?

This status is only to be used for one property at a time.  That property can be a single-family house, condominium, duplex or a four-plex.  If you decide to sell or rent your homestead and purchase a new home, there is a portability option available.  In fact, transferring the homestead to a new property, can lower the taxes based on the ownership of a previous residence.  Please note, it is not accurate to look at past property taxes to estimate future property taxes in Florida. For a rough estimate, we like to take 70% of the market value and multiply it by 2%.  

Although we specialize in Miami-Dade County real estate, these rules apply to all counties in Florida.  As local experts located in Miami Beach, we are happy to put you in touch with our trusted property tax experts.