Knock, knock, BOOM…this is the sound you hear when opening a notice of tax lien from your local property appraiser. The property appraiser’s letter states that you have 30 days to pay taxes, penalties, and interest, or there will be a tax lien filed on your home. There must be some mistake…how did this happen? Florida provides its residents several statutory tax exemptions, which lessen and/or eliminate the amount of ad valorem taxes due and owing with respect to real property designated as owner’s permanent residence and Florida’s property appraisers do not look kindly upon a homeowner that improperly claims said tax exemptions. Many homeowners are surprised to learn of their limited defenses when contesting a property appraiser’s cancellation of the Florida Homestead Tax Exemption (the “Exemption”).
Florida’s statutory exemptions are applicable only to a Florida permanent resident owner and only to a single homestead residence per family unit. A homeowner that claims an ad valorem exemption or tax credit in another jurisdiction is ineligible for the Exemption from the onset and will be penalized if discovered. Additionally, it is possible for a homeowner that once was eligible to claim the Exemption to subsequently become ineligible. This can occur when: (a) the property is leased for more than thirty (30) days per calendar year, for two (2) consecutive years; (b) the homeowner applies or maintains an out of state residency based tax exemption, reduction, benefit, credit, etc.; (c) the homeowner maintains or obtains a driver’s license in any other state; (d) homeowner fails to register a vehicle in Florida if you drive it here; and (e) the homeowner registers to vote in another jurisdiction.
If a property appraiser determines that a homeowner improperly benefited from the Exemption (and be aware that many property appraisers procure the services of private third-party auditors to verify their homeowners’ statutory exemptions AND generally every property appraiser has a fraud hotline to allow a neighbor, tenant or ex to inform on homestead fraud), then the property appraiser will collect said previously exempted taxes against the property, plus a penalty of 50 percent of the unpaid taxes for each year and 15 percent interest per annum. The property appraiser secures the forgoing indebtedness by a statutory tax lien that will continue to accrue interest on the property until paid in full. The Florida legislature has provided a statutory defense to homeowners. Fla. Stat. § 196.161(1)(b) states if a homestead exemption was improperly granted as a result of a clerical mistake or an omission by the property appraiser, the homeowner improperly receiving the exemption shall not be assessed penalty and interest. This is a narrow remedy and does not allow a homeowner to make a mistake.
So what happens if the homeowner inadvertently received a nominal occupation tax credit in another jurisdiction? Can the homeowner cancel his other residence’s tax credit and pay back those tax penalties to avoid the Exemption revocation? The answer is no. A recent appellate decision concerning a local Sarasota County case ruled against the homeowner stating that the Florida legislature needs to change the law to protect the honest, but mistaken homeowners. So if you are a homeowner that inadvertently received both a nominal residency credit in another state/county and the Exemption at the same time, you more likely than not will be out of luck and if you get caught will have to pay an expensive fine to your local property appraiser!
Remember, this is a basic explanation of the forgoing and our office strongly suggests if you have questions concerning any of Florida’s statutory exemptions and your homestead that you should consult with a Florida licensed real estate attorney. The consequences are too great to leave to chance!
Sincerely,
Berlin Patten Ebling, PLLC
Article Authored by Michael E. Schuchat , Esq. mschuchat@berlinpatten.com
This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
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