In Florida, homestead property refers to a primary residence that is afforded special protections and benefits under the state’s Constitution and laws. These protections are designed to safeguard the home of a Florida resident from certain legal actions and provide tax relief. Homestead property offers several key protections and benefits:
1. Protection from Forced Sale by Creditors
- Exemption from creditors: Homestead property is generally exempt from forced sale to satisfy most types of debts and creditor claims, except for certain specific debts like property taxes, mortgages, or debts related to improvements on the property.
- Unlimited value protection: The exemption applies regardless of the value of the homestead property, provided that it falls within specific size limitations (discussed below).
- Size limits: For urban properties, the homestead exemption applies to up to half an acre of contiguous land within a municipality. In more rural areas, the exemption applies to properties up to 160 acres of contiguous land.
2. Reduction in Property Taxes
- Homestead tax exemption: Florida allows homeowners to reduce the taxable value of their homestead property by up to $50,000. This can significantly lower annual property taxes.
- Save Our Homes (SOH) cap: Under the SOH provision, annual increases in the assessed value of homestead property are capped at 3% or the percentage change in the Consumer Price Index (CPI), whichever is lower. This limits property tax increases even if the market value of the home rises significantly.
3. Inheritance Protections
- Restrictions on devising homestead: Homestead property in Florida is subject to specific inheritance rules designed to protect surviving family members, particularly spouses and minor children. For example:
- If the decedent is survived by a spouse and/or minor children, the homestead cannot be freely devised to someone other than the spouse or minor child. The spouse generally has a right to a life estate or a half interest in the property, while the minor children receive the remainder interest even if the decedent’s Last Will & Testament suggests otherwise.
- If there are no minor children and only a spouse survives, the homestead can be left entirely to the spouse or as directed by a Last Will & Testament.
4. Automatic Passing Outside of Probate
Homestead property typically passes directly to the heirs or beneficiaries at death and does not become part of the probate estate, provided it qualifies as homestead under Florida law. This ensures that the homestead property is transferred efficiently to the surviving spouse or children.
Eligibility Requirements for Homestead
To qualify for homestead protection, the following conditions must be met:
- Permanent residence: The property must be the homeowner’s primary and permanent residence.
- Intent to reside: The owner must have the intent to maintain the property as their permanent home.
- Legal or equitable ownership: The homeowner must have legal title or an equitable interest in the property.
Key Statutes and Constitutional Provisions
- Florida Constitution, Article X, Section 4: Provides the homestead exemption from creditors.
- Florida Statutes, Chapter 196: Governs the homestead tax exemptions.
- Florida Constitution, Article VII, Section 6: Covers homestead property tax relief.
In summary, Homestead real property in Florida offers valuable legal and financial protections, including shielding the home from creditors, limiting property taxes and safeguarding inheritance rights for family members.
The foregoing is a brief and general overview of the topic. If you have any additional questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI in Miami Lakes, Florida.