The Homestead Exemption: A Huge Tax Advantage for Florida Real Estate 😎 

There's been a lot of talk about the rising costs of home ownership.

Higher interest rates, rising insurance premiums, and increasing property taxes are all putting the squeeze on homeowners and buyers. 

This week, we're going to focus on property taxes.

More specifically, we'll go over the best way to reduce your property tax cost on your primary residence: filing for your homestead exemption.

What is a homestead exemption? 🤔

In states that offer them, a homestead exemption is a status you get from your local county property appraiser that protects your ownership rights on the home and lowers your property taxes.

While many states offer homestead exemptions, Florida takes things further than most.

Florida is well-known for offering big tax breaks, strong protections, and unique features that keep your costs predictable over time.

Here's an overview of the features and benefits of Florida's homestead exemption:

The annual cap on property tax increase of 3% or the CPI (whichever is lower) is HUGE!

For reference, the cap in Texas is 10% a year so their taxes can increase much faster.

In other words, once you have the homestead exemption applied, your taxes will remain very consistent over time.

If you've got a locked interest rate on your mortgage and a homesteaded property, the only thing that should change your payment is your insurance costs.

Who's eligible for a homestead exemption? 🤷‍♂️

Some states can have more restrictions (age/income limits) on who gets to claim their homestead exemption, but in Florida, it's simple: people who own a primary residence in the state.

It doesn't matter how much money you make, the value of your property, or your age (as long as you're over 18).

Now, you only get one exemption at a time per married couple or single person and you have to have your driver's license set to the house to show you live there.

And generally you'll only be able to get one homestead exemption in one state at a time.

How do you get the homestead exemption? 🏡

You file for the exemption with the local county property appraiser.

Some counties require you to go in person. Others let you file online.

Either way, it's not usually a difficult process.

The most important part is that you do this in a timely manner.

You have until March 1st the year after you buy your primary residence to submit for the exemption.

For example, if you bought in 2024, you have until March 1st, 2025 to file and it gets applied to the new tax bill for your house that comes out November 2025.

Homestead exemption pro tips 💡

There are a few important points to remember when it comes to homestead exemptions:

• 📞 Call the county to make sure you get everything you qualify for. Sometimes people just accept the normal deduction and they actually qualify for additional benefits. If you connect with a person at the county office, they can help confirm you're getting everything you can.
  
  
• ↪️ If you forgot to file and bought a year (or five) ago, you can still file now to get the discounts going forward. You always have the option to file after the fact, you just can't go back in time and retroactively get discounts. Better late than never!
  
  
•  🏦 Get your payment adjusted immediately if you forgot to file and just did it. Many banks will go ahead and give you credit for the property tax discount if you just filed and can document that you got it. This could reduce your house payment right away!
  
  
• 🏡 Before you sell, appraise your house and boost your portability. Basically, you get the county to increase the value of your property before you move so you have as much value to apply to the next house as possible.
  
  

All-in-all, Florida's homestead exemption benefits are a major advantage for real estate owners in the state.

The combination of 0% income taxes, the homestead exemption, our climate, and Florida's growing economy are driving the real estate market to continue to grow throughout the Sunshine State.

They're also a big reason why we will continue to see so many people relocate and choose Florida as their destination. 🚀

Dr. Alex Stewart
Founder