If I rent my property, will I still be eligible for homestead exemption? This is a common question our office receives, and the answer is – it depends on the length of time the property is rented.
Homestead exemption reduces the property tax burden for Florida homeowners by decreasing the taxable value of a homeowner’s permanent residence. The homestead exemption total is now adjusted annually for inflation and changes each year. This year’s homestead exemption total is $51,411.
Florida Statute allows homeowners to rent their property for a short time without losing their homestead exemption. Renting a homesteaded property after January 1 of any year does not affect the homestead exemption for tax purposes for that particular year unless the property is rented for more than 30 days per calendar year for two consecutive years. An additional Florida Statute states that property rented for more than six months in any given tax year is presumed to be used for commercial purposes, which may affect a homeowner’s eligibility for the exemption.
These rental limitations on homesteaded properties do not apply to members of the Armed Forces whose service requires them to reside away from their homesteaded property.
It is important to know that if a property’s ownership changes to an LLC or other business entity, which commonly occurs with rental properties, the property will no longer be eligible for homestead exemption. All assessment limitation caps and exemptions associated with the homestead exemption will be removed.
Please contact our office before renting your homesteaded property so that we can provide guidance on the process.