By: Barry E. Haimo, Esq.
February 1, 2018
The Limitations of Florida’s Homestead Protection
Life throws curveballs at all of us from time to time. Maybe the market takes a turn for the worse. Or you lose your job. Or you find yourself unable to work due to an injury.
In these types of situations, it can be all too easy to overextend yourself and run afoul of creditors, but there are ways to protect yourself and your property. One of these ways is the Florida Homestead Act.
The general idea of the homestead statute is that it provides homeowners with protection from losing their home to certain creditors. In other words, if you are in a lot of debt and cannot pay, creditors can generally go after your homestead. The homestead laws keep them from trying to take your house and force a sale.
Compared to many other states, Florida’s homestead laws are quite generous, allowing you to claim protection for a home no matter how much it is worth. There are, additionally, property tax exemptions that you can apply for.
However, homestead protection does have limitations. This article will share the basic requirements for a property to qualify as a homestead and then detail the ways in which your protections are limited.
What Makes a Property a “Homestead” in Florida?
There are only three criteria that you need to meet:
- On January 1 of the year in question, you must have either a legal or beneficial title to the home.
- The property must be your permanent residence.
- Between January 1 and March 1 of the year you want the exemption, you need to apply for it in person at the property appraiser’s office of the county where your home is located. Typically, your home will retain homestead status until you inform the property appraiser’s office that it is no longer your homestead.
How Are Florida’s Homestead Protections Limited?
Despite having relatively generous homestead laws, as mentioned above, there are a few different limitations to the protections that you have:
There are acreage limits.
If you live in an urban area, you can only claim up to a half acre of land. Those in rural areas may protect up to 160 acres. Any area of your property that exceeds these limits can be sold by creditors.
Some creditors (and debts) overrule homestead.
If you are late on payments related to the home itself (HOA fees, mortgages, property taxes) or on bills for work done to the home (construction liens, vendor’s liens), these creditors have priority over your homestead protection and could potentially force a sale.
Additionally, if a creditor has a lien on your property before you claim a homestead, that lien still applies.
Importantly, there are homestead limitations on who can inherit it after your death, and they depend on whether you’re survived by a spouse and/or minor children. Consequently, these limitations apply whether you like it or not. You cannot override it in a will either. In fact, if you break the rules, DIFFERENT rules apply. Homestead is very tricky and must be given proper respect in planning.
If you would like to learn more about the benefits and limitations involved in declaring your house to be a homestead, get in touch with Haimo Law as soon as possible to discuss your options.
Barry E. Haimo, Esq.
Strategic Planning With Purpose
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