As housing professionals, we know homeownership has many benefits, but there’s one benefit we don’t talk about very much. It’s the homestead exemption. All states — except New Jersey and Pennsylvania — have homestead exemption laws.
If you’ve ever read a homestead exemption law, you know they can sound antiquated. In fact, some trace their history to the Colonial era. But the value of these exemptions has a real impact on the future, especially for a home buyer who’s concerned about paying property taxes.
Lowering property taxes is one of the biggest benefits of claiming the homestead exemption. In Florida, homeowners can deduct up to $50,000 from the taxable value of their homes by claiming the exemption. Lower taxable values create lower property tax bills.
Along with the $50,000 deduction, Florida homeowners can also claim the state’s “Save Our Homes” benefit. This benefit prevents the taxable value of a home from increasing by more than 3% from one year to the next. As a result, Florida homeowners in areas with fast-rising real estate values aren’t likely to be taxed out of their homes.
Homestead exemptions also shield homeowners from creditors who might otherwise try to sell the home to pay off debts during a bankruptcy or after the homeowner’s death. Florida is one of six states whose laws protect all of a home’s equity — not just a portion of it.
Of course, this part of the homestead law can complicate title searches, which makes title insurance even more important to homebuyers.
What’s more important is to claim the homestead exemption in the first place. It’s not an automatic benefit: New homeowners must apply for the exemption with their county tax appraiser’s office. Someone who’s never applied for the exemption before will have to provide specific information to confirm identity and address. The state provides details about how to file for the exemption here.
Homestead exemption isn’t Florida’s only property tax exemption. The Florida Department of Revenue lists other exemptions on this page.
As housing professionals, it’s our job to make sure new homebuyers — and existing homeowners in some cases — know how to take advantage of the homestead exemption and other ways to save money as homeowners. The exemption is a powerful tool. Every homeowner should know about it.
When we make sure our clients know their rights, we’re treating them like family, and that’s our ultimate goal at Butler Title: to treat every case like it’s our own.
Butler Title is a full-service, attorney owned and operated title insurance agency. We keep it simple and focus on what we do best: real estate closings. From first-time buyers to local moguls, BT provides an industry-leading fee structure and unparalleled experience.
P: 954.616.8735 F: 954.206.1097