Thursday, April 04, 2013

Can I rent my homestead property and keep the tax exemption intact?

Can I rent my homestead property and keep the tax exemption intact? Generally, the answer is no, and yes. Section 196.061, Florida Statutes, says that rental of a dwelling claimed to be a homestead for tax purposes "shall constitute the abandonment of said dwelling as a homestead." The new rental law (2012) discusses 'substantial portion' in regards to renting a homestead property. Previously the law required rental of the entire property. Now, a 'substantial portion' being rented may constitute abandonment. The issue now rests on the definition of 'substantial portion' since the Legislature failed to include the statutory definition in the new changes of the statute. Our opinion is that all 67 county property appraiser's will have differing opinions and will continue to extract every tax dollar out of the homeowner's regardless of the intent by the Legislators. Examples: If the renting of a homestead property begins after January 1st of a year regardless of the time period of the rental and there is a continuous rental covering any time period of the next consecutive year, that is considered as an 'abandonment' of the homestead under the law as of the second year. You cannot rent for two consecutive years. A seasonal rental (June-August) for two consecutive years (2012 and 2013) would disqualify the property for homestead exemption purposes. Likewise, a one-time rental from December of one year through February of the following year could also disqualify the property for homestead tax exemption as it would involve portions of two consecutive years. The only individuals allowed under the current law to rent a homesteaded property while retaining the exemption are active duty military personnel. If you have any questions, please visit us at