There are many tax benefits for Florida homeowners and ways to reduce your property taxes during tax season by taking advantage of homeowner exemptions and tax deductions. Property taxes in Florida have an average effective rate of 0.80%, compared to the national average of around 0.99%. The dues paid are based on a property’s assessed value, which is determined by your local county assessor’s office. If your assessment is too high, there are ways to address this. We want to help you take advantage of all the ways you can save on property taxes in Florida, so we offer these Florida property tax tips to help you reduce your bill.
What Tax Exemptions Are Available for Florida Homeowners?
The first $25,000 is applied to all your property taxes, including school districts. The additional $25,000 exemption applies to values between $50,000 and $75,000 but is not applied to school property taxes. After your first exemption, any increases in your home’s assessed value are capped at 3% or the annual increase in the Consumer Price Index, whichever is lower. There are many other ways to reduce your property taxes in Florida, such as using these Florida property tax exemptions:
Senior Citizens
Under Florida’s property tax law, county and municipal governments may allow an additional homestead exemption of up to $50,000 for residents who 65 or older, own real estate with a value of less than $250,000 which has been their permanent residence for at least 25 years.
There are also maximum income limits that apply to everyone who lives on the property. These limits are adjusted annually, so check with your county tax assessor’s office to see if you qualify. This exemption only applies to property taxes issued by the unit of government that grants the exemption.
Widows and Widowers
If a Florida resident’s spouse passes away, the survivor can receive a $5,000 property tax exemption. The survivor loses this exemption if they remarry.
Blind and Disability
Any Florida resident who is blind or permanently disabled can receive a $5,000 property tax exemption. Their disability must be certified by a certified Florida physician, the Department of Veterans Affairs, or the Social Security Administration. Blind residents must have a certificate from the Division of Blind Services of the Department of Education, the VA, or Social Security that certifies the applicant is legally blind.
Military Veterans and First Responders
Veterans and first responders who have a service-connected disability of less than 100% can receive a $5,000 homeowner’s exemption.
Service-Connected Disability
Surviving spouses of permanently disabled veterans can also receive the $5,000 homeowner’s exemption if they were married to the veteran for at least five years at the time of their spouse’s death and they remain unmarried.
Surviving Spouses of Veterans and First Responders
Also known as the Fallen Heroes Family Tax Relief Act, this provides a 100% property tax exemption for the surviving spouses of veterans and first responders who died from service-connected causes while on active duty. First responders include police, corrections officers, firefighters, EMTs, or paramedics employed by the state or local government. If the surviving spouse moves, they may still qualify for a portion of this exemption. If they remarry the exemption no longer applies.
Granny Flats
For those who have living quarters built for live-in parents or grandparents, homeowners can have their property assessment reduced based on the assessed value of the “granny flat,” or by 20% of a property’s total assessed value, whichever is less. The flat must have been added to an existing property after Jan. 7, 2003. At least one parent or grandparent must use the flat as their primary residence and must be at least 62 years old.
Historic Property Exemption
Florida’s property tax law gives counties and municipalities the right to allow property tax exemptions for up to 100% of the increase in assessed value that results from the approved rehabilitation of a qualified historic property. This exemption may be in effect for up to 10 years and it only applies to the portion of the tax bill that’s levied by the unit of government that issues the exemption.
For example, if you receive this exemption from your city’s government, the exemption would reduce the taxes you pay to your city but not the state, your local school district, and other taxing authorities.
Properties can be residential or commercial, but must be listed in the National Register of Historic Places, or a conjuring building in a National Register District, or designated as historic by a local preservation ordinance. All rehabilitation work must follow the guidelines of the Secretary of the Interior’ Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings.
Home Sale Exemption
If you sold a home within the past year and made a profit, you may qualify for a capital gains tax deduction from your federal income taxes. To qualify, the property must have been your primary residence. The gains ceiling for married couples is $500,000 and $250,000 for single people.
Mortgage Interest Deductions
In most cases, homeowners may deduct the mortgage interest they paid from their federal income taxes. Individuals and joint filers can deduct up to $750,000 in mortgage interest for loans that are used to purchase a primary or second home. Married couples that file separately can each deduct up to $375,000 each.
For homes purchased before Dec. 16, 2017 homeowners can deduct the interest they paid on the first $1 million of the mortgage, or $500,000 each for married couples filing separately.
Home Improvement Loan Interest
The interest on some home improvement loans may be tax-deductible. Under IRS requirements, the home itself must be used as collateral to secure the loan, and the funds must be used to “buy, build or substantially improve a taxpayer’s home that secures the loan.”
Home Office Deduction
Small business owners who work from home could use this to reduce their federal income taxes. This deduction is available whether you own or rent your home, although it’s not available for full-time employees who work remotely.
The home office must be used for work-related purposes on a regular, exclusive basis so it can’t double as some other use (such as a home gym).
There are two ways to make use of the home office expense deduction:
With the simplified option, you deduct $5 per square foot of office, up to 300 square feet, up to $1,500.
With the “regular method,” home office deductions are based on the percentage of the home that is devoted entirely to business use. The expenses related to this percentage can be deducted in full.
Appealing Your Property Tax Assessment in Florida
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- If your assessed value is higher than similar properties in your area.
- You were denied a property tax exemption that you’re entitled to, such as the homestead exemption.
- Classification denial, such as being rejected for a historic property classification.
- Denial of tax deferment, such as changes in ownership that affect your tax bill.
To appeal your property’s assessment or exemptions, you’ll have to file a petition with your county’s Value Adjustment Board (VAB). The Florida Department of Revenue offers information on how to do this.
If you’re appealing to get your property’s assessed value reduced, you’ll need an appraisal done by a licensed real estate appraiser. You might also consider hiring an attorney who specializes in property tax appeals. If your petition is denied, you’ll have the option of appealing it in court. Your lawsuit must be filed within 60 days of the VAB’s decision.
We Can Help You Make the Most of Your Florida Homeowner Tax Exemptions
Whether you’re thinking of buying or selling a property or would like a realtor’s perspective on property valuations, how to reduce your Florida property taxes, and what the real estate market is like in Central Florida, please contact a Showcase agent to make sure you’re benefiting from all the exemptions and deductions you may be eligible for. You can also subscribe to our blog to receive updates on the Florida real estate market and related issues.