Renting Your Florida Homestead? You Might Lose Your Exemption

Apartments For Rent In Pensacola Fl - Renting Your Florida Homestead? You Might Lose Your Exemption

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Many Florida residents, especially those transplanted from other states, spend only a part of the year in Florida. The rest of the time their Florida home is vacant. As they watch the economy erode their investments, some of them begin to contemplate the idea of renting out their home.

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Apartments For Rent In Pensacola Fl

One qoute of renting your Florida home for part of the year is the possibility of losing your Florida homestead tax exemption. You're not the only one looking for a slight additional income. The counties are also scratching a clawing for ways to fill in the big hole in their budgets. As a result, the county property Appraisers are on the lookout for residents that have abandoned their homestead tax exemption. One of the things they look for is resident property owners who rent out their homes.

Section 196.061 of the Florida Statutes reads: "The rental of an entire dwelling previously claimed to be a homestead for tax purposes shall constitute abandonment of said dwelling as a homestead, and said abandonment shall continue until such dwelling is physically busy by the owner..."

Most property Appraisers in Florida elucidate this as saying that an owner who rents his homestead loses the exemption for the year of the rental.

What does this mean to you? If the property Appraiser's interpretation is upheld -- bad news, that's what. You can lose the Florida homestead tax exemption which will cost you hundreds of dollars each year in increased property taxes. Additionally, and even more damaging, your assessed value for property tax purposes will jump up to equal the shop value of your property. This also will succeed in increased property taxes. In future years, you will have to re-apply for the exemption.

While this is bad enough, the pain doesn't end here. Florida law requires property owners to apprise the property Appraiser's office if you no longer qualify for the homestead exemption. If you fail to apprise the Appraiser and continue to take advantage of the exemption when you no longer qualify, you can be hit with some painful penalties. You may have to reimburse the county for back taxes -- as far back as 10 years -- plus 50% penalties and 15% interest. Ouch!

Does this mean you can never rent your homestead property? Not necessarily. The statute you looked at earlier in this article provides an exception. If you qualify for Florida homestead exemption on January 1 of a clear year and are not renting the property on that day, the rental of your home after January 1 will not influence the homestead tax exemption for that year. However, you cannot use this irregularity for 2 consecutive years.

So it appears you can rent out your homestead property every other year if the lease term commences January 2 or later.

However, before choosing to rent your home, it would be a good idea to seek guidance from your Florida attorney who is familiar with the homestead law.

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