Page 12 - Stuart Exposure - January '20

Page 12, Stuart Exposure

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Florida Homestead Tax Buyer’s taxes can skyrocket the year after closing. put children on title to their house so it passes automatically

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

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