Property Tax in Florida

UPDATE:  Since the below article was written, the Second District Court of Appeal has issued an opinion in the Pasco County Wells v. Haldeos case.  The 2nd District rejected the Property Appraiser’s contention that a married couple can never receive separate homestead exemptions, and instead held that “in the unique circumstances presented in this case, where the husband and wife have established two separate permanent residences in good faith and have no financial connection with and do not provide benefits, income, or support to each other, each may be granted a homestead exemption if they otherwise qualify.”

*     *     *

I’ve been procrastinating about addressing this topic for about a year now, because I keep thinking that one of these days the courts will issue a decision that finally puts this issue to rest.  But alas, as that hasn’t happened yet, I think it’s time to bite the bullet and go ahead and offer up a summary of what little guidance we do have on the question of whether and when a married couple can receive homestead exemptions on two separate properties.

Exemptions on Jointly-Owned Property

First, let’s address the easier matter of whether a person can receive a homestead exemption on their Florida residence if they or their spouse are already receiving an exemption on property in another state that is owned jointly.  The answer to that question is “no.”  Fla. Stat. 196.031(6) provides that a person who is receiving or claiming the benefit of an ad valorem tax exemption in another state where permanent residency is required as a basis for the granting of that ad valorem tax exemption or tax credit is not entitled to a Florida homestead exemption.  Thus, if your spouse is receiving a residency-based tax exemption or tax credit in Michigan and your name is on the title to that property, you will probably be denied a homestead exemption on your Florida property.

“But what if I am not on the title to my spouse’s homestead property?”, you ask.  Ah, that’s where it gets tricky.  Some counties will use the above provision as a basis for denying you a Florida homestead exemption because they believe that, even if you are not on the title to the property, because you are married, you are indirecly benefiting from your spouse’s out-of-state homestead exemption.  In the remaining counties, you may have a chance, but you still face one more obstacle – the “family unit” provision of the Florida Constitution.

“One Exemption Per Family Unit” Limitation

Since 1968, the Florida Constitution has provided that “not more than one [homestead] exemption shall be allowed any individual or family unit or with respect to any residential unit.”  When the Constitution was being adopted, the Constitutional Revision Commission originally proposed that the language limit the homestead exemption to “one per individual or married couple,” but the final version uses the phrase “family unit.”  Thus, the Property Appraisers and taxpayers of Florida have been forced to speculate as to what kind of relationship or living arrangement constitutes a family unit.  This issue has not been addressed by any appellate courts, but there is persuasive authority from the Attorney General’s office and several Florida trial courts that offer some guidance as to whether and when a married couple can claim separate homestead exemptions.

Attorney General Opinions

In response to questions from Florida Property Appraisers, the Florida Attorney General has issued several advisory opinions, which are not binding on the Property Appraisers, but are certainly given some weight.  In Attorney General Opinions 075-146 and 2005-60, the Attorney General interpreted the constitutional provision as allowing a husband and wife to establish separate family units, and thus receive separate homestead exemptions.  While the Attorney General did not provide any suggested criteria, he indicated that the Property Appraiser should consider the financial interdependence of the couple, and that if one spouse was maintaining the home of the other, they would probably not be considered separate family units.

Trial Court Cases

Although no appellate courts have issued a decision on this issue, several trial courts have weighed in.  In Pasco County, a circuit court judge disagreed with the Property Appraiser’s contention that a married couple automatically constitutes a single family unit entitled to only one homestead exemption.  The judge generally followed the Attorney General Opinions and found that the taxpayers were not a single family unit because one did not maintain the home of the other.

In Sarasota County, a circuit court judge considered the case of a married couple, where each spouse owned and lived in separate units within the same condominium building.  In that case, the judge ruled that the taxpayers were not entitled to separate homestead exemptions.  The judge found that in order to be entitled to separate homestead exemptions, the married couple would need to have filed for a dissolution of marriage and be able to clearly show an ending of their family relationship.

Finally, in Hillsborough County, a circuit court judge also found that a married couple was not entitled to separate homestead exemptions because their finances were substantially commingled, they were married, and they behaved like a family.

Conclusion

Married couples are statutorily prohibited form receiving dual homestead exemptions on properties that they own jointly.  However, where the properties are not jointly owned, they must still overcome the constitutional limitation of “one homestead exemption per family unit.”  There is currently no binding authority as to whether and when a married couple can be treated as two separate family units entitled to two separate homestead exemptions.  The Attorney General appears to believe that financial co-dependence is an important factor.  However, the courts have also looked at the couple’s relationship status.  In practice, some Property Appraisers deny dual homestead exemptions to all married couples, but most will follow up with the couple to obtain more information about their finances and, perhaps, their living arrangements.   The penalties for improperly receiving an extra homestead exemption are severe, so any couples who are contemplating seeking a second homestead exemption should be honest with the Property Appraiser about their married status and perhaps seek legal counsel to help them assess their situation and their legal rights.