Is It Necessary To Reside On Homestead Property? [Florida]

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Can you tell the difference between these two rules of entitlement to homestead status for ad valorem tax purposes?

Fla. Const. Article VII, §6(a): Every person who has the legal or equitable title to real estate and maintains thereon the permanent residence of the owner, or another legally or naturally dependent upon the owner, shall be exempt from taxation thereon . . . upon establishment of right thereto in the manner prescribed by law.

Fla.Stats. §196.031(1): Every person who, on January 1, has the legal title or beneficial title in equity to real property in this state and who resides thereon and in good faith makes the same his or her permanent residence, or the permanent residence of another or others legally or naturally dependent upon such person, is entitled to an exemption . . . as defined in s. 6, Art. VII of the State Constitution.

Okay, I underlined the difference, and the title of this article also clues you in. This difference was the principal issue in a recent Florida Supreme Court case. Under the case, two Honduran parents own a residence on Key Biscayne, Florida. They have temporary visas only, and thus are ineligible to indefinitely remain in the U.S. They live in the residence with their three minor children. The children are U.S. citizens. Miami-Dade County denied homestead status to the residence because the parents were in the U.S. on a temporary basis.

Florida case law does hold that one who does not possess the legal right to permanently reside in Florida cannot establish that their “permanent residence” is being maintained on Florida real property. Therefore, at first it appears that the temporary visas may be an issue here given the requirements for permanent residence.

However, on closer examination, both the Constitutional provision and the statutory provision allow qualification if the residence is the permanent residence of one legally or naturally dependent on the owner – the owner himself or herself need not permanently reside on the residence. Further, the appeals court noted that there is not even an obligation of the owner to reside on the property at all (whether permanently, or otherwise). While there is such a residency requirement for the owner in the statute, there is not one in the Constitution. Thus, the requirement of residency in the statute is unconstitutional. As an aside, this requirement in the statute is probably a hold over from a time when the Constitution did in fact require the owner to reside on the property (which is no longer the case).

The court went on to uphold the homestead status as a factual matter, since the children were eligible to stay in the U.S. permanently, even though the parents could not. While homestead status itself is not worth that much in savings for ad valorem taxes, presumably the County and taxpayers were more concerned about eligibility of the residence for the Save our Homes cap on annual increases in value for ad valorem tax purposes – an issue that can result in substantial tax savings over time.

While not discussed in the case, once the children are old enough to cease to be the dependents of their parents, then the above provisions will no longer apply and homestead status will then be lost.

Pedro J. Garcia v. David Andonie, Fla. Supreme Court Case No. SC 11-554 (Octo ber 4, 2012)

 

Published In: Constitutional Law Updates, Immigration Updates, Residential Real Estate Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Charles (Chuck) Rubin, Gutter Chaves Josepher Rubin Forman Fleisher P.A. | Attorney Advertising

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Charles (Chuck) Rubin
Gutter Chaves Josepher Rubin Forman Fleisher P.A.

A tax and business attorney who assists clients in preserving & enhancing individual, family &... View Profile »


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