As an Oviedo, FL homeowner or prospective buyer, you stand to benefit greatly from Florida’s Homestead Exemption. This valuable tax break allows qualifying residents to shield a portion of their home’s assessed value from property taxes, saving thousands over the years. The homestead exemption also makes it easier to buy and sell home in Oviedo by transferring accrued tax savings to a new property through Florida’s Portability Law. Understanding how homestead exemption work is key to maximizing savings as an Oviedo homeowner or buyer. This article will explain eligibility, the exemption process, and portability in detail so you can leverage these laws to your advantage.
What is the Florida Homestead Exemption?
The Florida Homestead Exemption (FHE) refers to a tax exemption available to homeowners who occupy their home as their primary residence. The FHE reduces the taxable value of a homeowner’s primary residence by up to $50,000, thereby reducing annual property tax bills.
Eligibility Requirements
To qualify for the FHE, you must own and occupy your home as your primary residence on January 1st of the tax year. Your home must also be within the State of Florida. Additionally, the FHE only applies to the first $50,000 of your home’s assessed value. The exemption amount is set by the Florida legislature and applies to all counties uniformly across the state. If the ownership or occupancy of the property changes during the year, the exemption may be prorated or removed.
Permanent Residence Requirement
The homestead exemption is only available for your permanent residence. This means that the home must be where you intend to reside for the foreseeable future . Vacation homes and rental properties do not qualify for the homestead exemption.
Ownership Requirement
To claim the homestead exemption, you must hold legal title to the property. This includes sole ownership, joint ownership with rights of survivorship, life estate ownership and ownership as beneficiary of a trust. Properties owned by corporations, partnerships or other legal entities typically do not qualify for the homestead exemption.
Applying for the Homestead Exemption
Homeowners must apply for the homestead exemption through the Seminole County Property Appraiser’s office. You will need to provide proof of ownership such as recorded deed or tax bill, as well as documents verifying your permanent residence at the property like driver’s license, voter registration or utility bills. The application deadline is March 1st to receive the exemption for that tax year.
How Much Can Oviedo Homeowners Save with Homestead Exemption?
Tax Savings and Other Benefits
The FHE can result in substantial tax savings for homeowners. For example, a homeowner with a $200,000 assessed home value would save $750 per year in property taxes (assuming a 3% tax rate). Over time, the tax savings can really add up. The FHE also helps stabilized home values and make homeownership more affordable, which benefits homeowners as well as potential home buyers.
Beyond Tax Savings
Aside from the considerable tax savings, the Homestead Exemption offers homeowners additional benefits. It helps shield homes from increased property taxes in the event of significant increases in property values. Homeowners can transfer or “port” the Homestead exemption to a new primary residence in Florida. The exemption can also provide asset protection, as it shields the first $50,000 of home value from certain creditors.
Does the Homestead Exemption Transfer When You Sell Your Oviedo Home?
When selling a homestead property in Oviedo, Florida, homeowners should understand how the homestead exemption and Save our Homes benefits are impacted. According to Florida Law, the homestead exemption itself is not transferable to new homestead. So, when the homestead property is sold, the exemption is removed, thus, the new owner must apply for the homestead exemption on the new property to receive any tax benefits.
Save our Homes Benefits Portable
While the homestead exemption does not transfer, the accrued tax benefits under the Save Our Homes assessment cap are portable and can be transferred to a new homestead within two years of abandoning the old homestead. The Save Our Homes cap limits the annual increase in assessed value of homestead property to 3% or less. The accrued difference between the capped value and the market value, known as the Save Our Homes Benefit, can translate to thousands of dollars in annual tax savings that homeowners can preserve when buying another homestead.
Time Constraints Apply
To transfer the Save Our Home benefit to a new homestead, homeowners must purchase and move into new homestead within two years of abandoning the old homestead. The new homestead must be in Florida. If homeowners miss this two-year window, the accrued tax benefits under Save our Homes will be lost. Homeowners should plan carefully when selling a homestead property to ensure they can benefit from transferring the tax savings to a new home.
A Competitive Advantage for Oviedo
Oviedo’s desirable location, amenities and strong community have made it an attractive place for the homebuyers in Central Florida. The additional tax benefits provided by Florida’s Homestead exemption and portability law give Oviedo a competitive advantage for attracting new residents and businesses. The tax savings for homebuyers and homeowners leads to more robust housing market and greater community prosperity.
Overall, the homestead exemption and portability law have a substantial impact on Oviedo’s homebuyer, homeowners and the community. By understanding how the exemption work, you can maximize your savings and make informed decisions when buying or selling a home.
Consult with a local real estate professional to determine your eligibility and how to leverage these exemptions during a transaction. With proper planning, you can take advantage of these generous provisions unique to Florida real estate and keep more money in your pocket. The homestead exemption reflects Florida’s commitment to promoting affordable homeownership.
