Ever wonder why O.J. Simpson moved to Florida? The sunshine and year-round warm temperatures certainly have their draws, but the real reason is likely due to Florida’s generous homestead protections.
Florida has one of the best homestead exemptions in the United States. By achieving homestead status, the homeowner is entitled to a tax reduction and protection from forced sale or levy. What makes Florida’s exemption so great is that there is no limit to the square footage of the home or the value of the property that can be protected from forced levy. Why was this enticing to O.J.? Well, he was essentially able to protect his money by purchasing a multimillion-dollar property in Florida and establishing homestead. Therefore, when he was civilly sued by Nicole Brown Simpson’s and Ron Goldman’s families and found liable in 1997, the families weren’t able to force him to sell the property to recover damages.
While this is all interesting, the primary purpose of this post is to explain the Florida homestead exemption, specifically as it relates to taxes.
What is the Florida Homestead Exemption as it Relates to Taxes?
The Florida homestead exemption is a protection afforded by the Florida Constitution that reduces a homeowner’s taxable value of their home.
Who Can Claim Homestead in Florida?
In order to be able to take qualify for the Florida homestead exemption, the homeowner must own and occupy the home as their primary residence and have the intention to continue residing in the property.
How Can a Homeowner Claim Homestead in Florida?
In order to claim the homestead exemption, the homeowner must fill out the application, known as the Form DR-501. The homeowner must also provide proof of Florida residency, which can be done with documents including, but not limited to, a Florida driver’s license or state ID, Florida vehicle registration number, Florida voter registration number, bank statement and checking account mailing address, proof of payment of utilities at homestead address, or declaration of domicile. Homeowners have until March 1 to file the application and must have resided in the homestead property on January 1 of that tax year in order to claim the homestead exemption.
Once homestead status is established, it continues until abandoned; therefore, the homeowner does not need to reapply each year.
If you have questions about Florida Homestead exemptions, reach out to Erica at email@example.com.