Florida’s broad homestead laws could protect your assets from creditors. For proprietors who live on their own property, Florida real estate code offers certain protections. Those with a title or deed to a self-inhabited property can apply for homestead status.
This unique legal status offers significant tax breaks and benefits. Declaring property a homestead renders the first $25,000 of your property value exempt from taxation. For properties with value above $50,000, additional tax breaks may apply. Homestead laws protect the dwelling place of owners and their families despite financial mistakes or bad investments. Invoking homestead status removes your property from the reach of most creditors, ensuring that your family has a place to live.
Potential drawbacks
Certain creditors can override this exception, so it’s important to plan carefully. The federal government, Florida state and local governments, certain mortgage creditors and unpaid laborers who worked on the property can still lay claim to anything owed. Any prior liens against the property are also still valid.
There are also additional complications when it comes to selling the property. A married property owner cannot sell or transfer the property without a spouse’s legal consent. Even after the property owner dies, the homestead cannot pass to a third party while a spouse or minor children survive. The property must go to the spouse first, then to any minor children.
Obtaining homestead status
To obtain homestead status, you or a dependent must reside full time on the property in question. Rental properties can sometimes slip through loopholes but are generally excluded. You will need to register the property title or deed with the county, and you must complete an application every year before March 1 to retain the status.