Separate Homestead Exemptions for Married Couples


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.”

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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.

Qualifying for a Florida Homestead Exemption


The March 1st deadline to apply for a Florida homestead exemption is rapidly approaching.  If you moved to a new home within the last year, this is a deadline you do not want to miss.  This article will explain the benefits of the Florida homestead exemption, the requirements for an exemption, how to apply for an exemption, and what to do if your application is denied.  It will also address some of the thornier issues, such as rental of homestead property and claiming multiple exemptions per family.

Benefits of a Homestead Exemption

There are numerous financial benefits to having a homestead exemption on your property.  On the most basic level, the homestead exemption itself entitles most homeowners to a deduction of $25,000 off of their property’s assessed value, which can result in several hundred dollars in tax savings.  If your home is worth at least $75,000, you will receive an additional $25,000 deduction from your assessed value, although that additional deduction will not apply to school tax levies.  Once you establish your right to a basic homestead exemption on your property, you may also qualify for additional homestead exemptions if you are over 65 years old or have a disability.  But perhaps most importantly, receipt of a homestead exemption means that, pursuant to the Save Our Homes Amendment to the Florida Constitution, the assessed value of your homestead property cannot increase more than 3% per year or the percent change in the Consumer Price Index.  Moreover, in many cases, this tax savings can  now be transferred to a new Florida residence if you move.  Thus, while the basic homestead exemption may only save you a few hundred dollars per year, the rights that come with a homestead exemption can be extremely valuable.

How to Apply for a Homestead Exemption

Homestead exemption applications must be filed with the county Property Appraiser by March 1st of the tax year for which the exemption is sought.  Thus, in order to receive a 2010 homestead exemption, you must apply by March 1, 2010.  If you acquired or moved into your new home after January 1, 2010, then you would not qualify for a 2010 homestead exemption, but you can go ahead and apply now for a 2011 homestead exemption.   If you already have a homestead exemption, you probably do not need to re-apply, as most counties use an automatic renewal process, whereby you only need to notify the Property Appraiser if you are no longer entitled to the exemption.

What property qualifies for a homestead exemption?

Pursuant to Fla. Stat. 196.031, in order to qualify for a homestead exemption, as of January 1st of the tax year in question, you must have either legal or beneficial title to the property for which you are seeking an exemption, and the property must be the permanent residence of either yourself or someone who is legally or naturally dependent on you.  Thus, the property can be owned by a trust, as long as the applicant retains beneficial title and a possessory interest in the property.  However, the homestead exemption may not be claimed by a corporation.

The property must also be you or your natural dependent’s “permanent residence,” which is defined by Fla. Stat. 196.012(18) as “that place where a person has his or her true, fixed, and permanent home and principal establishment to which, whenever absent, he or she has the intention of returning.”   In determining whether the property is your permanent residence, the Property Appraiser may consider a number of  statutory factors, including but not limited to the existence of a formal declaration of domicile, where your children are registered for school, your place of employment, residency in another state, the address where you are registered to vote, the address on your driver’s license or identification card, vehicle registration, the address on your federal income tax returns, the address on your bank statements, and proof of payment for utilities at the subject property.

Also, the homestead exemption only applies to that portion of the property that is classified and assessed as owner-occupied residential property.  Thus, mixed-use properties may only receive the homestead exemption benefits on a portion of the property.

Can a taxpayer claim more than one homestead exemption?

No.  In fact, Fla.Stat. 196.031 prohibits anyone who receives the benefit of a residency-based property tax exemption or tax credit in another state from also receiving a Florida homestead exemption.  Thus, not only can you not claim two Florida homestead exemptions, but you also cannot claim an additional residency-based exemption in another state.

Can my spouse claim a separate homestead exemption on property that they own independently?

Possibly.  The Florida Constitution only allows for one homestead exemption per family unit.  While the proper interpretation of “family unit” could, and likely will, take up an entirely separate article, most Property Appraisers interpret this provision to mean that a married couple can only receive one homestead exemption.  The Attorney General’s office and some trial courts have interpreted this provision to occasionally allow for separate homestead exemptions where the couple is separated or can prove financial independence.  However, not all Property Appraisers agree with this interpretation and this issue continues to wind its way through the courts.  Anyone who plans to try to obtain separate homestead exemptions should seek the advice of an attorney in order to avoid potentially costly penalties in the future.

Can I still receive a homestead exemption if I rent my property?

Possibly.  Fla. Stat. 196.061 provides that the rental of an entire dwelling constitutes the abandonment of that dwelling as a homestead.  However, under the Florida Constitution, the ultimate issue is whether the property was your permanent residence on January 1st of that tax year.  In recognition of that fact, the statute contains an exception, which states that abandonment of a homestead after January 1st of any year shall not affect that year’s homestead exemption as long as the property is not abandoned after January 1st for two consecutive years.  Thus, a snowbird who heads up north for the summer could conceivably rent their property every other year during the warmer months without losing their homestead exemption.

But isn’t it okay to rent homestead property, as long as you don’t rent it for more than 6 months?

No.  The confusion on this issue came about because, pursuant to Florida Statutes 196.081, 196.091 and 196.101, certain disabled veterans and other totally and permanently disabled persons are entitled to a complete exemption from all property taxes for their “real estate that is used and owned as a homestead.”  Florida Statute 196.012(13) then defines this phrase “real estate used and owned as a homestead” as the person’s homestead property, less any portion thereof used for commercial purposes.  The statute then states that “property rented for more than 6 months is presumed to be used for commercial purposes.”

In effect, if a permanently disabled veteran used a portion of their homestead property for commercial purposes, such as by renting a room or using a portion of the property for a home office, they would not receive a complete tax exemption on that portion of the property, although they would arguably still be entitled to the homestead exemption on the entire property.  In the author’s opinion, this definitional statute applies only to the total exemption for certain disabled persons, and not to the basic homestead exemption.  However, some Property Appraisers apply the 6 month rental limitation in their homestead exemption determinations, and a recent appellate decision may add fuel to that argument.

Conversely, just because the property is presumed to be used for commercial purposes if rented for more than 6 months does not mean that you can safely rent your property for less than 6 months without losing your homestead exemption.  As discussed above, your right to a homestead exemption is determined as of January 1st.  Thus, rental of homestead property on January 1st of any tax year, even for a few months, is a risky move.

Appealing a Denial of Your Homestead Exemption Application

The Property Appraisers are required to notify taxpayers by July 1st if they plan to deny their application for a homestead exemption for that tax year.   Fla. Stat. 194.011 then gives the taxpayer 30 days to file a petition to the county Value Adjustment Board.  Please note that if the Value Adjustment Board denies your petition, you have only 15 days in which to file an appeal to the circuit court.  See Fla. Stat. 196.151.  If you do not want to file a petition to the VAB, you can file an action directly in the circuit court, but such a lawsuit must be filed within 60 days of certification of the tax roll.