Living in the state of Florida many people mention Florida’s Homestead laws and protections. But, few people truly understand the full extent of protections Florida’s Homestead laws give Florida Residents. Homestead is a constitutional protection located in Article X, § 4, of the Florida Constitution. There are three aspects to Homestead in Florida: (1) Creditor protections; (2) The ad valorem real property tax exemption and limitation on annual increases in property tax valuations; and (3) Restrictions on the devise of Homestead property.
The first aspect is the creditor protections Homestead provides. The purpose is to provide stability and welfare in one’s home. The law accomplishes this by allowing no judgment or execution lien to be placed on one’s home. This prevents creditors from forcing a sale on one’s home. There is no dollar limitation on one’s Homestead property, even in the event of bankruptcy. The only exceptions where a creditor can get a judgement, execution lien, or force a sale on the home are: (1) collection of taxes and assessments on the Homestead property; (2) obligations contracted for the purposes (Ex: Mortgage on the Homestead property); and (3) improvements or repairs on the Homestead property.
The second aspect that Homestead provides is the ad valorem real property tax exemption and limitation on annual increases in property tax valuations. This exemption either reduces or possibly eliminates ad valorem taxes associated with one’s Homestead property. In general Florida residents do not have to pay ad valorem taxes on the first $25,000 of the appraised value of their Homestead Property. Additionally, if the Homestead property is assessed for over $50,000 then the owner gets another $25,000 exemption. Finally, there is amendment #2 on the 2018 ballot to add, if the homestead is assessed for a value greater than $100,000, then the owner is entitled to an additional $25,000 exemption totaling up to $75,000.
The third aspect that Homestead provides is restrictions on the devise of Homestead property. Article X, § 4(c), of the Florida Constitution states: “The homestead shall not be subject to devise if the owner is survived by spouse or minor child, except the homestead may be devised to the owner’s spouse if there be no minor child.” Therefore, even if the property is titled in one spouse’s name the Homestead laws could prevent that transfer if the owner has a spouse or minor child. There have been numerous issues, and case law where one has their property titled in a Trust’s name and tries to give it someone other than the spouse. Homestead laws have typically prevented this type of transfer and have given the property to a spouse or a minor child, in addition to life estate interests.
Florida’s Homestead laws are very complicated and in order to properly plan for all the possible issues that could arise it is important to speak to an attorney. For more information about Homestead or if you’re interested in having an estate plan to address these concerns please contact GRANTLAW, P.A. at (239) 649-4848 or go to our website https://www.grantlawswfl.com/