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One Family Cannot Claim Homestead Exemption in Two States

Date 03-31-2016

real estate, real estate closings, real estate transactions

by Khila L. Khani, Esq.

On March 23, 2016, the Fourth DCA a/k/a the appeals court of Florida decided in VENICE L. ENDSLEY, Appellant, v. BROWARD COUNTY, FINANCE AND ADMINISTRATIVE SERVICES DEPARTMENT, REVENUE COLLECTIONS DIVISION; LORI PARRISH, as Broward County Property Appraiser, et al., Appellees. 4th District. in Case No. 4D14-3997 that Article VII, Section 6(b) of the Florida Constitution does apply if a homeowner has a second exemption property in another state, however, it is NOT unconstitutional to deny a spouse her exemption if the other spouse sought exemption in another state.  What does that mean for you, the property owner of two homes in two different states?

Let’s rewind a bit and explain how the Florida Homestead Exemption works.  The State of Florida, via the Florida Constitution, exempts a portion of a Florida homestead from ad valorem tax. This exemption can potentially save taxpayers a few hundred dollars each year. The economic value for homeowners is that such an exemption, under Florida’s Save our Homes provision, caps the ad valorem tax value increases to 3% per year, despite the fact that the value of the residence may increase by more than 3%.

In the case cited above, a husband owned a residence in Indiana. On the property in Indiana, he received a residency-based property tax exemption, somewhat similar to the tax exemption provided by the Florida Constitution. His wife, however, owned a Florida property that she claimed as her residence and received a Florida homestead ad valorem tax exemption. In August 2006, the Broward County Property Appraiser did their homework and revealed that husband and wife were double dipping with the dual exemption filings.  The Broward County Property Appraiser audited the exemption with support from Article VII, Section 6(b) of the Florida Constitution, which reads in part that “[n]ot more than one exemption shall be allowed any individual or family unit or with respect to any residential unit.” Based on that provision, the Appraiser’s office sought to remove the homestead exemption from the couple’s Florida property, even though the property was held in the wife’s name alone, for 1996 through 2006 – this would remove the cap on the value for ad valorem tax purposes and thus, remove the 3% Save our Homes protection.

As mentioned above, the appeals court reviewed the lower court’s decision and decided that the Constitution provision applies if the second exemption property is in another state.  Furthermore, the appeals court decided that it is NOT unconstitutional to deny the wife her exemption on the Florida property because her husband sought exemption in another state.

Florida homeowners with families, you are now informed, warned and advised that you cannot claim homestead in two different states, even if you are married and have individual ownership of those two different properties. One family cannot claim homestead exemption in two states.

At Khani & Auerbach, it is our goal to educate the public as much as possible about changes in real estate law. Khani & Auerbach is here to help.