Page 11 - Hobe Sound Reflections - January '20

Hobe Sound, Page 11

eState planning

Florida Homestead Tax (CPI). Each year the Save Our Homes credit accumulates Once the deed to the buyer is recorded, the property

Savings Are Wonderful, Rules and over time and as property values increase homeowners appraiser will be reassessed the property as of the
save thousands in real estate taxes.
following Jan. 1 at current fair market value, and seller’s
Can Be Tricky When a Florida homeowner moves to another home in Save Our Homes credit, homestead exemption and other
the state they can take their Save Our Homes accumulated credits are removed.
By Carrie Lavargna credit with them to the new house. It’s not automatic and Buyer’s taxes can skyrocket the year after closing.
Florida homestead the homeowner must apply for homestead and portability Buyer’s mortgage company generally escrows for real
exemption laws save of the Save Our Homes credit with the property appraiser in estate taxes, collecting one-twelfth of the annual taxes as
homeowners a lot of money in the county where the new house is located. The homeowner of closing to the buyer’s monthly mortgage payments. This
property taxes. Homeowners has only two years to claim portability of their Save Our escrow is so the mortgage company has the funds to pay
must apply for homestead and Homes credit. next year’s real estate taxes. If the buyer’s taxes for the year
other exemptions by Feb. 28 of Buyers need to be savvy about real estate taxes and not after closing are more than the previous year’s taxes, the
the year following purchase. assume property taxes will be the same for the year after mortgage company’s escrowed funds may be insufficient
In the first year of homestead closing. If the present homeowner has homestead exemption to pay the buyer’s higher taxes.
exemption, the homeowner his or her taxes are assessed based upon the fair market The mortgage company will pay the taxes but then
saves an average of $400 to value reduced by the Save Our Homes credit, the homestead the buyer’s tax escrow will be increased to reimburse the
$600 in property taxes. exemption and any other exemptions claimed, such as VA mortgage company for the shortfall in taxes from the previous
It gets better because the “Save Our Homes” law provides disability or low income senior. year plus an amount to cover the following year’s taxes.
that the assessed value of the homestead cannot increase Recording any deed requires the property appraiser to This can cause a really big financial burden on the buyer
annually by more than 3 percent or the Consumer Price Index re-examine the property taxes. in year two and three after closing. That is why it is important
to understand the real estate taxes before you buy.
Once a homeowner has homestead exemption, any
Kids Corner from page 10 change in title can affect homestead status. Seniors
like to put children on title to their house so it passes
The Education Foundation automatically to the children upon death. Seems innocent
of Martin County (EFMC) enough but this small change if not done correctly can
is a 501(c)(3) community cause loss or reduction of homestead exemption and Save
investment organization Our Homes credit.
comprised of business leaders, Putting your homestead into a trust can be a good estate
community volunteers and planning technique; however, the property owner may have
school officials with the to reapply for the homestead exemption so that the property
common goal of enriching appraiser can review the trust to make sure the special
and enhancing the quality of language preserving the homestead exemption is included
education for students and in the trust.
educators in Martin County’s Remember the recording of any deed can affect your
public schools. For more homestead exemption.
information, visit www. This column is an overview of the subject matter and
EducationFoundationMC.org. is not intended as legal advice. Carrie Lavargna is an
attorney practicing law in Stuart at Lavargna Law, PLLC
Mel Nobel, Jeanine Webster, Andrew Kennedy, Louise Kennedy, Sarah Testa and Rich and is board certified in real estate law by The Florida Bar
Testa Stuart at EFMC’s Teacher of the Year event and is designated an accredited estate planner (AEP) by
the National Association of Estate Planners and Councils.