FLORIDA HOMESTEAD EXEMPTION--WHY NOT WAIT TILL NEXT YEAR?

Last Friday, March 31st, was one of the busiest days of the year at the Miami-Dade County Property Appraiser's Office. What were all those taxpayers doing standing in line? Were they all last-minute filers of tangible personal property tax returns due April 1st annually? Decidely not.

They were post-deadline applicants for the 2006 homestead exemption. The filing "deadline" was March 1st, as it is each year. So what were these folks doing waiting in line 30 days AFTER the filing deadline?

Under a kinder, gentler regime established by the Florida Legislature, taxpayers can now miss March 1st--formerly a "drop-dead" deadline--and file for homestead exemption at any time they can file a Value Adjustment Board petition, namely, until the 25th day following the mailing of the Notices of Proposed Taxes ("TRIM" Notices). TRIM Notices are typically mailed during the second or third week of August each year.

The additional steps necessary after March 1st include the filing of a Value Adjustmenet Board petition, payment of a $15.00 filing fee, and showing of "good cause" for late filing--typically at a subsequent hearing.

Is it worthwhile for all these taxpayers to stand in line and jump through all the extra hoops mentioned above, instead of just waiting till 2007 to apply? You bet!

Remember, homestead exemption from property taxation in Florida is valuable for two distinct reasons. First, it exempts from property taxes the first $25,000 in assessed valuation annually. Depending on the millage or tax rate, this may amount to annual tax savings of $600 or more. Second, and more important, is that the homestead exemption "caps" increases in value at 3% or the cost of living increase--whichever is less--for every year the exemption continues after it is established.

So, the earlier you get the homestead exemption established, the lower your homestead exemption base year assessment--and each subsequent year's assessment--will be. Considering a real estate market that continues to appreciate at record rates, this is something that should clearly been done earlier, rather than later.

One example will drive the point home. Let's look at the home of Coach and Mrs. Pat Riley, of Miami Heat fame. (Isn't the Florida Public Records Act fun?)Click here to see Coach Riley's 2005 tax assessment.

Coach's taxes for 2005 were $248,358. If he had been eligible for and obtained a homestead exemption starting in 1997 instead of 2002 or so when he actually obtained it, his annual tax bill would have been nearly $100,000 less per year; you heard me, about $8,000 less per month--all due to the homestead "cap" and the difference between a homestead exemption base year of 1997 and a base year of 2002.

So if you're entitled to a homestead exemption, apply now--don't wait till next year!

We'll tell you more how to go about doing this in a future blog entry. So watch this space.
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Daniel A. Weiss is a former Attorney Special Magistrate for the Miami-Dade County Value Adjustment Board. Mr. Weiss now represents residential, commercial, institutional charitable, commercial, high-end residential, agricultural and municipal taxpayers at VAB proceedings throughout the State of Florida. Mr. Weiss handles both valuation and legal claims.

Mr. Weiss has over 25 years property tax experience. Mr. Weiss represented the Miami-Dade County taxing authorities in litigation and appeals between 1981 and 1995 as a Miami-Dade Assistant County Attorney and has since represented taxpayers in property tax matters.

In Florida Trend magazine’s “Legal Elite” issue, July 2004, Mr. Weiss was selected by his peers as one of the top 30 government lawyers in the State of Florida.

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