Homestead laws can provide benefits to homeowners. State lawmakers initially passed such laws to encourage home ownership. These laws continue to offer benefits to homeowners in Florida.
Three ways homestead law can work in a homeowner’s behalf include:
- Exemption from forced sale. In most cases, a creditor cannot come after one’s permanent residence, or homestead, to settle a debt. There are some exceptions to this rule. These can include recovery for property taxes, past due association fees, mortgage debt or debt from contractors who completed work on the home. This right transfers to heirs.
- Property tax exemption. In Florida, the state generally exempts the first $25,000 assessed value of the property from property taxes. Additional reductions may be available for the next $25,000 if the state assess the home value for at least $50,000. This has translated to significant savings for Florida homeowners. As an added benefit, a homeowner can transfer up to $500,000 of this exemption if the homeowner moves to another property within the state.
- Restriction on transfer. Florida state law does not allow a homeowner to transfer a homestead without agreement from a spouse. A homeowner can gain agreement by having the spouse sign a joinder or waiver. Although likely intended to help better ensure the home stays within the family, these laws can make it difficult to determine who receives the home when the homeowner dies.
Although often beneficial, the homestead laws in Florida are some of the most complex in the country. The state legislature has also taken into consideration proposals to change these laws, most recently considering an expansion of the exemption value. Although this proposal did not move forward, changes are possible. As a result, homeowners attempting to navigate these laws are wise to seek legal counsel.