Florida Supreme Court Hears Case For Denying Homestead Exemption To Non-Residents

On Monday, May 7, the Florida Supreme Court heard arguments in a case involving a Honduran couple that could have major implications for all non-residents of Florida who wish to establish homestead and reduce their ad valorem property tax obligations within the state.  The case involves David and Ana Andonie, who migrated to Florida from Honduras on investment visas and were denied a 2006 homestead exemption on their $1 million home despite the fact that their three minor children were born in Miami, were U.S. citizens, and had never resided outside the State of Florida.  The Miami-Dade Property Appraiser argued that, under common law, the children were residents of Honduras because that was the permanent residence of their parents and therefore denied the exemption.

Article VII, Section 6 of the Florida Constitution allows for homestead protection from ad valorem real property taxes.  The effect of this provision is to exempt the first $25,000 of property value from the computation of taxes for all purposes and also to exempt another $25,000 of value for homes worth up to $75,000 for all purposes but the property taxes calculated for schools.  The Constitution also imposes a cap on the rate at which property values can increase for tax purposes.  Currently, this cap stands at the lesser of 3% or the percent change in the consumer price index (the rate of inflation).  Additional exemptions may be obtained under certain circumstances, including:

• A $500 exemption for widows and widowers;
• A $500 exemption for persons with disabilities;
• A $500 exemption for blind persons;
• A total exemption for individuals with certain severe disabilities such as a quadriplegic, paraplegic, hemiplegic, or other totally and permanently disabled persons;
• A $50,000 exemption for persons 65 or older, depending on the county or municipality;
• Additional exemptions for veterans and deployed military.

A 2008 amendment allows for the portability of homestead protection for up to $500,000.  Thus, Florida residents may transfer their homestead protection from taxes to a new home as long as they establish their new homestead within 2 years of leaving their previous homestead.

Although the issue may appear to be one of immigration, this decision would actually impact all non-residents, whether they are from a foreign country or another state, and could determine if non-resident homeowners can obtain homestead property tax exemptions like the ones listed above. The court’s decision will be closely watched, as it has the potential to affect all people who own a home in Florida, which is not their permanent residence, and wish to seek a homestead exemption because they have a legal dependent living in the residence in Florida who would otherwise qualify.  Given Florida’s status as an east coast retirement haven, the potential of this state court decision to directly affect a large number of people outside the border of Florida is exceedingly high.