Florida Homestead Exemption: Keep 100% When You Co-Own

Transcript

trim notices are out, and trim notices means that everybody is starting to see how much their taxes on their real property is going to be for this year. Some people are seeing some big jumps, so we’re starting to get a lot of calls about that. And I am building a lot of questions about the homestead exemptions as well as real property, commercial property exemptions, as well as some other fine.

 

legal hair issues that have been crossing my desk over the past few weeks since the trim notices hit. As land trustee, the land trust company, we processed around 17 or 1800 trim notices. in just a couple of weeks we received those at the office and we scanned them and shared them through the portal with all the beneficiaries within hours of receiving each one of them.

 

We’ve got a new system that does that for us now that we developed in-house, uses AI to read the trim notices, determine the property address that it goes with, and then put them into the portal automatically. Then a human being reviews that and hits share if it’s all correct. So you should have gotten your trim notice from mylandtrustee.com.

 

If you are a beneficiary of a land trust, where mylandtrusted.com, one of their entities, is the trustee. And if you haven’t yet, then you need to contact our office to find out about that. But to the business at hand. One of the issues that has come up in the past week is over the years, we had a lot of people who inherited property usually through an enhanced life estate deed or through a will or through a trust. And they inherited that property.

 

From their parents or grandparents. And it was left to multiple beneficiaries. But only one beneficiary moved into the property, while the other beneficiaries have homesteads elsewhere. So they filed for homestead and they’ve been receiving 100% homestead for the property, even though only maybe one person out of the four has been living in the property as their homestead. Well, with the homestead amendment that’s going to hit the ballot in November, I’ll discuss that more here in a minute.

 

The property appraisers have been really scrubbing their data to ensure that they are not giving homestead exemptions, at least 100% homestead exemptions on properties that don’t deserve it. And one of those types of properties are properties like that, where you have multiple beneficiaries, multiple people who own it together, usually siblings or cousins. They own that property together, but only one person.

 

Or two of them maybe have moved into the property as their homestead while the others live elsewhere in other homesteads, or maybe even not in the state of Florida. So we’ve received some calls about this. And one of the things that you can do to get that homestead and hang on to it, and it’s a weird little quirk in the homestead exemptions and homestead save our homes act laws, but

 

If you hold title as joint tenants’ rights or survivorship, then you can get 100% homestead savings, even though only one of the named parties actually lives in the property. So for instance, if I owned a my home that I’m living in, if I owned it with a brother and a sister, for instance, I inherited it from my

 

Dad. And I moved into it years ago and it’s in my name, my brother’s name, and my sister’s name. Nothing else is said. It is presumed that we own that property as tenants in common, which means that when I die, my one third share goes to my heirs. My brother’s one third share goes to his and my sister’s one third share goes to her heirs. However, the property appraisers are catching that now.

 

They’re they’re rescrubbing their list and they’re finding that they have been giving 100% to me because I live in the property, even though there are two other owners. I should have only been receiving one-third of the homestead savings and exemptions. While my brother and sister didn’t live in the property, they were not entitled to it. However, if we had taken title as myself, my brother, and my sister.

 

As joint tenants with the rights of survivorship and not as tenants in common, there’s a quirk in the statute regarding the homestead savings, and there’s a quirk in the administrative code that interprets that statute. And then there’s also a, I believe, nineteen ninety-eight attorney general’s opinion that says if you own that property as joint tenants’ rights of survivorship, even if only one of

 

the owners, named owners, lives in that property, you are still entitled to 100% of the homestead exemption. So it’s just a it’s just a quirk in the law. It’s the the legislature just put it in there. So what we’ve been doing is now now joint tenant ship, if you see my other videos, you understand that that’s sort of the last one standing is the property. So instead of my share when I die going to my heirs

 

My share goes to my brother and my sister, who are still standing. And then when one of them dies, the last share goes to the last one standing. So that’s joint rent joint tenants with rights of survivorship. the last one standing gets it. A lot of people don’t want that. They want their share to go to their heirs. But in some cases, they go, No, the homestead savings and exemptions are much more important. And we have other

 

ways that we are dealing with our shares of ownership in this property. So we’re not so concerned about that. So we want to go ahead and ensure that we’re going to get 100%. So what we do in that case is we usually do a corrective deed. Number one, it’s a corrective deed, to correct the titling to joint tenants, rights of survivorship as the parties intended it when they initially took title. So it’s usually effective as of when they took title.

 

Which could have been years ago. But they sign it today and it’s dated today. But there’s sp special language we put in there to explain why we are doing this and to make it relate back to the date that they took title to create that joint tenants’ rights of survivorship so that they can retain that one hundred percent homestead exemption that they have been getting all these years, even though there are three owners. It’s not just one third, it’s a hundred percent. It’s not thirty three percent, it’s a hundred percent or

 

however many heirs you have who own that property. So we’ve been getting that last year and this year. we get those calls and we we do that. One thing that we recommend though is you don’t just you don’t just do it and you know send it up on a wing in a prayer and hope that it it works. You also should file a valuation adjustment board petition.

 

before the deadline. And in this case in Orange County, the deadline is September 18th, 2026. In 2026, is is the deadline that you have to file your petition with the VAB board, evaluation adjustment board. The VAB board does not is not part of the property appraiser’s office. So don’t go to the VAB, don’t go to the property appraiser’s office looking for forms to file that VAB petition.

 

The VAB is handled by the clerk of court. So you have to go to the clerk of court’s office or search for the clerk of court’s office and valuation adjustment board for your county where your property is located so that you can get that petition. In the larger counties like Orange County, you just file that petition online and it creates a form DR four thirty eight, I believe. Don’t quote me on that, but I seem to remember that’s the form number. It’s Department of Revenue form.

 

DR 438. And just says that you are challenging the loss of an exemption or a reduction of an exemption that you’ve normally had or that you were denied. You can also the reason it’s called valuation adjustment board is because most of the petitions are really about valuation. You believe that the property appraiser has overvalued a property. so you’re challenging their their valuation of it.

 

But in this case, you’re challenging the valuation insofar as you have not received the exemptions that you think you’re entitled to. So you file that, it’s a $50 fee. You have to pay the fee, you have to file the petition before the deadline to preserve your rights. Then you can deal with all the paperwork you need to do to try to ensure that you were supposed to have gotten that exemption. And once you’ve done that.

 

You will have a hearing. It may be telephonic, it may be by WebEx or Zoom. And it is a special magistrate who hears the case. They are a completely neutral judge. The property appraiser is sort of the defendant and you’re s you’re the petitioner. They’re the respondent. And they are fighting to say, no, you should have lost your exemption or no, the value is right. And you’ve got the experts and the paperwork on your side saying, well, no, we’re right.

 

And then the special magistrate sits down and listens to the testimony and puts it all together and listens to the the law and the rules and regulations and then puts together an opinion and then if you don’t like that opinion you can appeal to the full valuation appeal board. If that doesn’t work, you can then appeal then to circuit court. but most people don’t go that far unless they’re talking about just millions and millions of dollars in value, like the big theme parks or or or shopping malls or

 

farms, agriculture land, things like that. So that is one of the biggest questions we’ve been getting. And I tell everybody, you know, look at your trim notice if you don’t agree with it. If if you see something that doesn’t look right, there’s a problem, first call the property appraiser’s office, try to talk with them informally about it. But if you’re coming up on that deadline, go ahead, file the petition with the VAB board at the at the clerk of court’s office and pay your fee so you preserve your rights to continue challenging

 

problem that you that you see. Okay. So that’s real estate tax, property tax issue number one that we’re hearing about. Number two is the, of course, the ballot amendment three that is going to be on the ballot in November. And this also deals with exemptions and savings on not only homestead property but also commercial property.

 

And a lot of people just asking us, you know, what does it mean? Should I vote for it? Should I not? I’m not going to get into whether you should or shouldn’t vote for it. There are a lot of other people out there who who have delved into this issue a whole lot more deeply and longer than I have. Tom McNamara has a great YouTube channel. If you don’t follow him, I definitely recommend you follow Tom McNamara’s channel. And he has been on top of this since

 

the governor first blurted out that he was going to get rid of property taxes in Florida completely. That’s how it started. And of course it’s pulled back since then when people realize, wait, it takes money to run a government. and so now what we have, and I’ll just I’ll just explain it to you in plain terms. So traditionally in Florida since about 1990, the early nineteen nineties,

 

We have had what’s called the Save Our Homes cap. And for homesteads, your valuation of your home could not increase by th more than 3% a year or the rate of inflation, whichever was lower. So in some years, the rate of inflation was less than 3% and of of home prices. And sometimes it was much more than 3%. So during the Great Recession, of course, properties.

 

Retreated in value. During the post-COVID years, property values blew up in value. So during those times, your property may have gone down in value, or it didn’t go up more than 3%, even though your home actually went up in value, maybe 10, 15, 20%, it was capped at 3% for taxes. And that’s that’s been the case for a very long time.

 

So it keeps your value down and you’re taxed on the value of your property. And there’s the taxable value and there’s the market value. So for your homestead, rather than being taxed at your market value, you are taxed at your assessed value, which could be much, much, much lower than your market value. Then what they do is if you move from one homestead to another in the state of Florida, you get to take those savings that you’ve built up on one homestead.

 

And take it to another home. That was added a few years later because they realized that people were just never going to sell their homesteads if they could it because they didn’t want to lose all those savings that they had built up in one home. So it stagnated the real estate market. So they they and I’ve always said this, free economics is is a is a real thing. As you tweak one thing in the tax code, it changes behavior somewhere else. So by saying, well, your savings just continue to grow, grow, grow the longer you stay in your home.

 

If you can never take those savings with you, people are never going to sell their homes. They’re just going to stay in them until they’re absolutely forced to sell the property and move. So we came up with the portability and now you can port that savings from one home to to your next home.

 

The last time that the so that’s to save our homes. It also applies to commercial property, in that commercial property cannot increase in value more than 10% a year for tax purposes, as long as it’s under the same owner. As soon as you change title on on commercial property though, you lose the 10% cap and you go to market value and you’re being taxed at market value. So that’s why we’re so careful when somebody comes to us and says, Hey, I just want to move this.

 

you know, apartment building from this LLC to that LLC or from this LLC into a land trust. We’re very careful about how we do that because and we and we want to make sure the client understands, hey, doing this, your taxes could increase. I mean, I’ve seen increases by over a hundred thousand a year of an increase. So we’re very, very cognizant of this practicing in Florida, any lawyers who practice in Florida. You don’t just willy nilly change title on real estate.

 

Because you could lose a tremendous amount of savings simply by changing title. So that’s the caps, and that’s the save our home cap and the commercial cap. Then we also have the exemptions, where if it’s your homestead, now this does not apply to commercial property, but on homestead property, currently the first $50,000 of value is not taxed. So if your home is worth less than $50,000.

 

you you don’t have any real property tax except for s for school tax. You’ll have s you’ll always have school tax. But even that is ha is subject to a twenty-five thousand dollar exemption or reduction in value. So a lot of people you go, okay, well great, I’ve got a fifty thousand dollar reduction or or or a twenty-five or a seventy-five thousand dollar reduction on the value of my property for tax purposes. So at first

 

$50,000 to $75,000 is just not taxed. Now that has not been increased since 2008. And $50,000 in 2008 is worth about $77,000 in buying power today in 2026. So now let’s get to the ballot initiative. What what they’re pro proposing. If this passes, and it must pass with 60% voting in favor of it, of the people voting that year, 60%

 

have to vote in favor of it.

 

So, number one that this is going to do, it’s going to increase that homestead exemption for non-school taxes from $75,000 to $150,000. So it’s going to double it in 2027. Then in 2028, it’s going to go up to $250,000 and then it will increase every year with the rate of inflation. So

 

At that point, if your home is worth $250,000 or less, yes, you wouldn’t have anything but school taxes on your property. You wouldn’t have county taxes and fire taxes and city taxes and everything else out there that that wouldn’t be included. Now, with that said, it’s also provides that if you’re a new resident, so if

 

And and not only new resident, but if you have not filed for homestead in Florida before December thirty-first, twenty twenty-six, this one hundred and fifty thousand, two hundred and fifty thousand dollar cap will not apply to you. So if you have not, if you are living in Florida and you have a homestead in Florida, you need to ensure, no matter what, I mean, in any case, that you have filed for your homestead exemption so that you’re at least saving the fifty thousand dollar exemption and the twenty five thousand dollar exemption.

 

But if you haven’t filed before December thirty-first, twenty twenty-six, even if you’ve lived in Florida forever, the way this is written, you will not get this new, you will not get this increased exemption. It will be as if you just started the process and you have to wait five years before you will get the the full savings of this. So for that reason, we’re telling everybody, if you have lived in Florida already and you already live here and you’ve already got a homestead here.

 

It’s your home, file for your exemption. Do it before December 31st, 2026. Don’t wait till March 1st, 2027 to do it. Go ahead and file it now so there’s no question that you’re covered. Because this is really going to reduce by billions and billions of dollars the amount of money that cities and counties will have to operate. So property appraisers are working very hard.

 

To try to find as much money as they can for the cities and counties by either just not granting these exemptions or taking exemptions away, as I was saying earlier. So

 

Another thing it’s going to do is for the commercial property. Remember what I said about commercial property is they cannot increase in value more than 10% a year or the rate of inflation, whichever is lower. So that’s going to lower from 10% to 5%. So now commercial properties also cannot go up in value by more than 5% a year, which is almost as good as homesteads are now at 3%.

 

So that will be a major savings for commercial properties as well: hotels, apartment complexes, shopping malls, office buildings, things like that. So that will help there as well. The final thing that this ballot initiative will do is it will from the state level constrain cities and counties are allowed to spend.

 

tax dollars on. They will only be allowed to spend property tax revenue, property tax revenue, on public safety, so fire and police, education, infrastructure, natural resource projects and flood control, local bonds, so money they’ve borrowed, they can continue paying their their bonds, employee retirement benefits, and government operations.

 

That’s it. So there’s been some question as to whether that allows them to continue. Is is our libraries, does that fall under education? Or are libraries not going to have any funding in counties and cities? parks and rec. Does that fall under natural resources? Probably not.

 

So will parks still be maintained and cared for? Parades, fireworks shows, movies in the park, splash pads, park expansions, all these things that make a community, make a town a town, will those be allowed to use property tax revenue to pay for them, or will cities and counties have to go out and find sponsors?

 

to businesses to sponsor those things, to sponsor the Christmas parade, to sponsor the Veterans Parade, to sponsor all these different events that they have, arts facilities, the symphonies, the orchestras, pottery classes at the at the local library. Is that considered education? So there are a lot of questions as to

 

how cities and counties are going to run and will they be the nice areas to live that they are now, or will they just become very ascetic places where people don’t really, you know, it’s they’re not they’re not a community anymore like they like they have been. You don’t have the cultural events to go see because now all the cultural events are completely relying on corporations for sponsorships and

 

in a recession or whatever corporations may just go, Yeah, we’re gonna cut our money to that, or we want you to only do this or only do that. If you do this, we’re not gonna fund you anymore. so that’s one of the arguments that people have been making against it as to how it’s going to work. Also cutting the property taxes in this way, even using only using property taxes for these things,

 

fire departments and police departments, roads, water systems, infrastructure. Yes, they’re allowed to spend the money on those things, but will it be enough money considering they’re going to cut the revenue so drastically by billions of dollars in these cities and counties that it’s that they’re not going to have the money there to spend on these things.

 

Because the revenue is just not enough to support it. So that’s that’s some of the questions that have been raised by it, as to how it’s going work and whether it’s going to hurt cities and counties to the point that they can’t afford to do what they need to do. A lot of people say, well, counties and cities are just spending too much money anyway. other people argue, well, yes, they spend a lot of money and it has gone up, but so has the population.

 

a lot more people to service, a lot more infrastructure to maintain, infrastructure gets old, it has to be repaired, it has to be replaced, new sewer lines, new water lines, those are not cheap. that’s not cheap work. So, you know, how does it work if if the money is cut? So in a way they’re trying to couple spending cuts with the revenue cuts, but the whole thing is is will it

 

be able to keep the standard of quality up enough that more people will continue to want to move to Florida and live in these places? Or will they prefer to live in other states that have better funded parks and rec, better funded infrastructure, better funded s safety and and fire and all these other things. also a lot of people, you know, you don’t think about it, but if fire and

 

Police, if if they have to reduce and and cut their coverage, that affects your insurance on your house. so it’s a trade-off. I know that from living in more rural areas in the country during my life, that the farther you lived out, the higher your insurance your insurance was because it was going to take longer for the fire department to get there in case of a fire, letting the damage go on longer. And also fire hydrants were not.

 

as prevalent and water systems were not as prevalent. So your your fire insurance was a lot higher because they figured, well, your house is probably going burn down before anybody can save it simply because the fire department is so bad. And that’s why s a lot of cities are very proud of their their fire response times and their police response times because it cuts down on theft and it cuts down on burglaries and it cuts down on on fire, which then helps keep your insurance rates a little bit lower because of that. So

 

That’s pretty much what that that amendment will do. and and exactly how it’s gonna work. The biggest thing we’re telling people, which I’ve been preaching for 30 years, is if you live in Florida and you own your home in Florida, file for your stupid homestead exemption, please. And especially it’s more imperative now that you do it before December 31st, because if this passes.

 

If this passes and you have not filed, you may be missing out for another five years on these savings. And you’re just you’re just wasting money. If it’s going to pass, take advantage of it. Save the money. and and you know, don’t don’t let this gift slip through your fingers if it does pass simply because you didn’t file a form and provide some paperwork to prove that it is your homestead and you’ve been here.

 

Since before December thirty-first, twenty twenty six. That would that would just be crazy. So let me know what you think about that down in the comments. I love to hear your comments about this. like I said, we’re gonna put a link down to Tom McNamara’s YouTube channel as well. Again, he’s got a lot more information on this than I do. The Florida Association of Realtors is really supporting it. of course, a lot of the commercial property,

 

owners, large commercial property owners and apartment owners especially are opposing it. for them, the 5% extra valuation savings is not enough to cover the the losses that they think are going to be covered in other places. They think rates will just go up on taxes and then they will also start doing a lot more special taxing districts calling MSBUs, Metropolitan Special

 

benefit use units or or MSTU’s taxing units that will be created for special projects in different areas just to provide infrastructure. Maybe, for instance, maybe downtown Orlando needs new water lines and that’s going to cost a billion dollars. They would create a special taxing district just for downtown that would pay just for those

 

those improvements because the regular property tax income is not sufficient to cover it. That happens to be a lot of apartments down there. And the apartments are now going to get hit with that. So they have to raise their rents, which then would push people out of those apartments in downtown. And then maybe they move out to the suburbs to another place that already has newer water lines. So a lot of the commercial big commercial property owners are are fighting this. Again, the Florida realtors are all for it.

 

but I just recommend, you know, do do your research. Think about it. don’t just think about the immediate effects of how it may benefit you. Think farther down the line. this is not checkers, this is chess. You have to think of, you know, many moves down the road of, well, if I do this or this happens, how is that going to affect other things? Yes, it may save me here, but it’s gonna cost me there, or it’s gonna save me here and it’s gonna save me there. Who knows?

 

But just definitely a lot to think about. It’s not a simple issue. and it is a massive increase in the exemption for homesteads that that that that well outstrips the amount of inflation that has happened since the last increase occurred. I agree that it should have been tagged to inflation from the get-go. That would have been smart.

 

And would have been nice. And I don’t think that we would be even having this conversation now if they had done that in 2008, the last time they increased the exemptions, because it would have slowly been increasing. And like I said, it’d be around 70 or so you’d probably have about a hundred thousand dollar exemption now for non-school taxes. So just definitely something to think about. Again, let me know if you liked it, hated it, comment below, subscribe, and until later.

 

We’ll see ya and trust us.

 

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