Homestead Exemption Denial May Be Illegal
myhom...@bellsouth.net
Parrish claims that they have uncovered property owners who claimed
homestead exemptions to reduce taxes on vacation homes and rental
property, not their primary residence. The investigation allegedly
relied a great deal on tips from neighbors but has begun moving into a
new phase in which investigators are checking tax records against
utility bills to rat out those who have homestead exemptions on real
properties where the appraiser claims that the homeowner's don't
currently live, although they claim to live there. Our response to this
abuse of the law and the total disregard of the common law is as
follows:
Just to clarify the law a bit, we thought we would let you know the
facts regarding what constitutes a homestead, as we feel that the
property appraiser is wasting tax dollars and unnecessarily burdening
the taxpayers due to her ignorance of the law and total disregard for
the cases on record. One's Homestead is a rather simple equation in the
end; use of the residence plus intent to remain. The notion of "home"
is an elusive and elastic concept that remains a powerful component of
virtually every culture. Emily Dickenson wrote, "Where thou art, that
is Home." Robert Frost observed that "Home is the place where, when you
have to go there, they have to take you in." Johann Wolfgang von Goethe
claimed, "He is the happiest, be he king or peasant, who finds peace in
his home." And Christian Morgenstern offered, "Home is not where you
live, but where they understand you."
The notion that the home is not only one's castle but that one's castle
should be protected from one's creditors is very much a part of the
American legal landscape, and that is never more evident than in the
very generous homestead exemption found in the Florida Constitution.
The constitutional provision exempting a homestead does not designate
how title to the property is to be held and it does not limit the
estate that must be owned; therefore, an individual claiming a
homestead exemption need not hold fee simple title to the property.
Once a property acquires the status of a homestead, that characteristic
continues to attach to it unless the homestead is alienated in the
manner provided by law. Alienation (the legal definition) means
complete written declaration of abandonment or purchase of a new
homestead, or renting out of the entire parcel of homestead property on
a permanent basis. A homestead will lose its status by abandonment only
when the owner voluntarily abandons the homestead with no intent to
return. Briefly renting a home while traveling back and forth to
another state or country does not abandon the homestead status. Absence
for financial, health, job, travel, family or any other reason is not
abandonment.
In order to qualify his or her property with homestead status, the
person seeking the homestead exemption simply must have an actual
intent to live permanently on the property, as well as the actual use
and occupancy of the property. A citizen's right to homestead
protection under the Florida Constitution is considered a paramount
rule of public policy that would justify departure from an otherwise
applicable rule of comity. For the purposes of the homestead exemption,
it is enough if the one claiming the homestead exemption has any
beneficial interest in the property; it is not necessary that he hold
any legal title to the property. Mere possession without any title
whatever is sufficient to support the claim of homestead, where such
possession is lawful. Any equitable or beneficial interest in land also
gives the claimant the right to exempt it as his homestead. Thus, under
Florida law, a homestead exemption can only be claimed for one parcel
of property, that property must be owned by the person claiming the
exemption, and it must be the primary residence of the owner or his
family. What constitutes homestead property is a question of fact. Both
the physical characteristics of an asset, as well as its use, should be
considered in determining whether the asset is exempt under the
homestead laws.
In order that the claim of homestead be sustained, the disputed
premises must be occupied as a homestead by the claimant as his actual
residence. The fact that a certain homeowner had never filed a tax
return in the United States was not sufficient to demonstrate that the
debtor did not live in the home in question for purposes of the
homestead exemption. A taxpayer must reside on the property on January
1 of the relevant tax year in order to satisfy the requirements of
Article VII, section 6, Florida Constitution, and section 196.031,
Florida Statutes, which authorize the tax exemption for qualified
homestead property. However, Florida courts have held that the physical
presence of the owner is not a requirement of either the Florida
Constitution or the statute. The overriding test is whether or not it
is the "family home" in actuality, and has the element of permanency.
Ultimately, all that is required to establish a homestead under Florida
law is that property owner reside on property and, in good faith, make
property his permanent home.
In order to be entitled to the homestead exemption, continuous,
uninterrupted residence is not required. Although daily residence is
not essential, a homestead right does not extend to property that the
claimant has not occupied as a dwelling place or home. It frequently
happens that a homesteader may own two separate pieces of property
within the state, both of which he may occupy at intervals. It is a
general principle, however, that there must be an intention to reside
on the property as a permanent place of residence before a claim of
homestead rights therein may be sustained. And it seems clear that the
claimant cannot have two permanent residences at the same time, the
designation of one property as the home being a question of fact. If it
is shown that the owner has ceased to occupy the disputed premises and
has established his residence elsewhere, he may not successfully claim
a homestead right therein.
In the recent bankruptcy case of 'In re Prestwood' (US Bankruptcy
Court, Case No. 02-23764-BKC-PGH-7, So. Dist. Of Florida), the
trustee's position in this case sought to recover certain alleged
fraudulent transfers and also objected to the debtor's claimed
homestead exemption. The debtor listed an interest in a condominium
located in Pompano Beach, Florida, which he claimed as his homestead.
The first count of the complaint contended that the debtor was not
entitled to claim a Florida homestead because he never intended to live
in Florida but simply kept a "vacation property" here. It was the
debtor's contention that he lived in Florida but routinely traveled
back to California for his work. The confusion related to the
residential property the debtor and his wife owned in Huntington Beach,
California. However, for purposes of the homestead issue, the inquiry
is rather simple: did the debtor in fact move to Florida with the
intent to reside there indefinitely?
The trustee, however, pointed out that prior to the bankruptcy filing,
the debtor did not have a Florida bank account or own a car registered
in Florida. The debtor failed to claim Florida's homestead ad valorem
property tax exemption, which only allows for a reduction in the
payment of real estate taxes for Florida residents. The debtor's
bankruptcy petition showed a California mailing address. The debtor's
tax returns listed the California home as his residence. On credit
applications and personal guaranties given to vendors doing business
with a corporation, the debtor listed the California property as his
residence. The trustee also supplied the Court with bank records
showing the use of his wife's debit card; most of the charges which
were incurred in California, not Florida. Perhaps the most significant
objection the trustee raised to the court was regarding the debtor's
purported Florida homestead is the fact that the debtor continued to
work for various California companies.
What this array of conflicting testimony means is that there is no
"smoking gun," no concrete, conclusive evidence of the debtor's actual
domicile or homestead. Such things as one's mailing address become a
transitory concept, based more on ease of access wherever one might be
at the moment, rather than on the idea that one's mail should be sent
to where you "live." It is, one might suggest, simply the modern
equivalent of the old saying, "Home is where I hang my hat."
None of this, however, should imply that such a debtor is to be denied
the opportunity to claim a homestead to the extent one is appropriate.
Indeed, one of Florida's strongest exemptions is that which protects
homestead property. As more than one court has indicated, the Florida
Constitution grants debtors "a liberal exemption" for homestead
property. In Florida, a homestead is established when there is "actual
intent to live permanently in a place, coupled with actual use and
occupancy." Ultimately, all that is required is that the property owner
reside on the property and in good faith make the same his permanent
home. Exceptions to the homestead exemption must, by law, be strictly
construed in favor of claimants and against creditors or legal
challengers.
However, on the issue of this debtor's homestead, the Court had to
eventually conclude that the debtor had provided sufficient evidence of
his residence in the Pompano Beach condominium and his "actual intent"
to live there permanently prior to the filing of this bankruptcy case.
His declaration of homestead affidavit and claim was sufficient.
One's homestead or domicile is a rather simple equation in the end:
residence plus intent to remain, along with the homestead declaration
claim.Exceptions to the homestead exemption are to be "strictly
construed" in favor of any claimant, and the courts can only conclude
it that a debtor resides on the property and "in good faith" intends it
to be his permanent home should a claim be filed. Being a Florida
resident, having your bills and mail sent to the same address, and
having a driver's license showing the same address, is not required,
although the statute gives the property appraiser the right to use
those items as part of the issue regarding the facts of each case. The
statement in the article linked below; "the only place to dispute a
lien is in a courtroom..." does not ring true.
Is your homestead exemption legal?
Florida statutes are vague when it comes to describing who qualifies
for homestead tax exemption status and Save Our Homes tax breaks. To
learn more, one must turn to the judicial system and the court opinions
on the matter. To qualify for the tax exemption, a person must intend
for their Florida home to be their permanent residence on Jan. 1 of
the tax year. There are clear opinions, however, for how much of the
year that person must actually live in the home.
Beyond the residency requirement, what is considered illegal
homesteading changes from one county to the next depending on how local
officials interpret state law. the problem is, they don't know the
court rulings and case law on the matter. Questionable practices per
the property appraiser include:
* Renting out a home you own;
* Applying for homestead status on more than one property;
* Putting one homesteaded property in a husband's name and a second in
a wife's. [Note: Not necessarily a violation, in fact it is allowed]
* A person loses their protected status if they sell their home, give
it away or will it to relatives who aren't already listed as owners.
You are breaking the law if you claim a homestead illegally, but
chances are you won't be prosecuted. Instead, counties typically place
a lien on the property to collect the unpaid taxes, fees and interest.
In addition to forcing repayment of any money saved, state law allows
for a 50 percent tax penalty and 15 percent annual interest on the
illegal savings. Someone who saved an average of $2,000 a year for five
years could be hit with a $16,500 bill.
Intention to establish a permanent residence is a factual determination
to be made, in the first instance, by the property appraiser as allowed
by statute. The following are relevant factors that may be considered
by the property appraiser in making a determination as to the intent of
a person claiming a homestead exemption to establish a permanent
residence in the state:
(1) formal declarations of applicant; [Note: this is one reason that it
is so important to make your homestead declaration claim]
(2) informal statements of applicant;
(3) the place of employment of the applicant;
(4) the previous permanent residency of the applicant in a state other
than Florida, or in another country and the date the non-Florida
residency was terminated;
(5) the place where the applicant is registered to vote; [Registration
for voting is not a prerequisite to obtaining a homestead exemption.
[1953-54 Op.Atty.Gen. 69]
(6) the place of issuance of a driver's license to the applicant;
(7) the place of issuance of a license tag on any motor vehicle owned
by the applicant;
(8) the address as listed on federal income tax returns filed by the
applicant; and
(9) the previous filing of Florida intangible tax returns by the
applicant.
Observations and Case Law: Any one factor is not conclusive of the
establishment or nonestablishment of permanent residence. [FS §
196.015] Registration for voting is not, however, a prerequisite to
obtaining a homestead exemption. [1953-54 Atty Gen Op 69] An applicant
for Florida's homestead tax exemption is not required to be a citizen
nor to have purchased Florida license plates for his or her motor
vehicles nor to have registered to vote in the county in which the
homestead property is located in order to qualify for the homestead tax
exemption. Such facts may be looked to by the assessor in making his or
her determination of whether the applicant has established his or her
"permanent residence" on its property, but the presence or absence of
such facts is not conclusive of the establishment or
non-establishment of permanent residence. [Op.Atty.Gen., 074- 115,
April 10, 1974] A homestead exemption may be claimed by a nonresident
of the state who owns property in the state and maintains thereon the
permanent residence of another who is legally or naturally dependent on
him. [Op.Atty.Gen., 082-27, April 20, 1982] A property owner who was in
good faith making the property his home was entitled to homestead
exemption under Constitution, notwithstanding that he was not a United
States citizen. [Smith v. Voight, 158 Fla. 366, 28 So.2d 426 (1946)] An
Alien in this state with a permanent visa, with no intention to apply
for citizenship, is entitled to homestead exemption pursuant to this
section. [Op.Atty.Gen., 071-242, Aug. 17, 1971] Actual physical
presence on property on January
1 is not necessary in order to claim homestead tax exemption. [Poppell
v. Padrick, App. 2 Dist., 117 So.2d 435 (1959)] Homestead character of
a piece of property is not created by, nor is it dependent upon, any
general or specific mental intent on part of owner to create or
maintain a certain piece of property as his homestead, but arises and
attaches from existence of certain facts in combination in place and
time; neither is existence of the homestead in any manner dependent on
claiming or failing to claim entitlement to an exemption from and
valorem taxes that legislature has by this section conferred on persons
who in good faith permanently reside on real property in which they
have a certain ownership interest. [In re Newman's Estate, App. 5
Dist., 413 So.2d 140 (1982)] Under Florida law, resident is entitled to
homestead exemption unless it is shown that both the owner and owner's
family abandoned the property. [In re Kalynych, Bkrtcy.M.D.Fla.2002,
284 B.R. 149] Once property has acquired status of homestead, such
status continues until abandonment has occurred. [Poppell v. Padrick,
App. 2 Dist., 117 So.2d 435 (1959)] Although the rule seems to be that
an absence from one's homestead for an extended length of time is not
of itself an abandonment of the homestead, such an absence may raise a
presumption sufficient to cast the burden on the person claiming the
homestead exemption to satisfy the tax assessor that there has in fact
been no abandonment; such an absence may be taken, together with other
evidence tending to show an abandonment, to show an abandonment and no
actual intention to return to the property and further maintain it as a
homestead. [1958 Op.Atty.Gen. 058-329, 058-229 (Revised), Dec. 10,
1958] Mere absence for a long period of time is not of itself
sufficient to establish abandonment of homestead and deprive it of its
character and tax exemption, where claimant never acquires another
homestead, and there is no showing that he did not intend to return.
[1958 Op.Atty.Gen. 058-229, July 22, 1958] Rule, that temporary absence
will not deprive homestead claimant of his right unless it appears that
there was a design of permanent abandonment, applies to homestead tax
exemption privilege. [Poppell v. Padrick, App. 2 Dist., 117 So.2d 435
(1959)] Mere absence from one's homestead for health, pleasure or
business reasons is not of itself an abandonment, but may be
considered, in connection with all other available evidence, in
determining whether there has been or has not been an abandonment of
the homestead. [1958 Op.Atty.Gen. 058-329, 058-229 (Revised), Dec. 10,
1958] Temporary absence will not deprive homestead of its character and
tax exemption. [1958 Op.Atty.Gen. 058-229, July 22, 1958] There must be
an intention, either express or implied from facts, to abandon premises
as a homestead before owner should be denied homestead exemption from
taxation, and a temporary renting of the homestead is not an
abandonment thereof, if there is no intention to abandon the premises
as a homestead, and no other homestead has been acquired. [1958
Op.Atty.Gen. 058-229, July 22, 1958]
If, upon investigation, the property appraiser finds that the applicant
is entitled to the tax exemption applied for under the law, he or she
shall make such entries upon the tax rolls of the county as are
necessary to allow the exemption to the applicant. If, after due
consideration, the property appraiser finds that the applicant is not
entitled under the law to the exemption asked for, he or she shall
immediately make out a notice of such disapproval, giving his or her
reasons therefor, a copy of which notice must be served upon the
applicant by the property appraiser either by personal delivery or by
registered mail to the post office address given by the applicant. The
applicant may appeal to the value adjustment board the decision of the
property appraiser refusing to allow the exemption for which
application was made, and the board shall review the application and
evidence presented to the property appraiser upon which the applicant
based the claim for exemption and shall hear the applicant in person or
by agent on behalf of his or her right to such exemption. The value
adjustment board shall reverse the decision of the property appraiser
in the cause and grant exemption to the applicant if in its judgment
the applicant is entitled thereto or shall affirm the decision of the
property appraiser. [Fla. Stat. 196.151, et. seq.] Opportunity of
homeowner to be heard in quasi-judicial proceeding before the Board of
Tax Adjustment before denial of his homestead tax exemption met
requirements of due process. [Horne v. Markham, 288 So.2d 196 (1973)]
The nature and extent of any investigation by the property appraiser
concerning the validity of execution and filing of a homestead
exemption application or short form renewal card by an agent operating
under specific power of attorney are matters that must be
administratively determined by the property appraiser pursuant to his
express statutory duties to examine and investigate such homestead
exemption application form to determine if it complies with Florida
Law. [Op.Atty.Gen., 082-99, Dec. 1, 1982] Since no homestead
application could be denied except by final action of the Board of Tax
Adjustment, decision of tax assessor disapproving late application was
a tentative administrative decision which did not require prior notice
or hearing. [Horne v. Markham, 288 So.2d 196 (1973)] Where an
application for homestead tax exemption was found to be false and the
claimant not entitled thereto, after the same had been allowed, the
exemption could be withdrawn and denied by the taxing officials, but
the taxpayer should have had an opportunity to be heard upon the
question of his claim before the tax assessor and the board of county
commissioners in full compliance with antecedent to this section. [1961
Op.Atty.Gen., 061-1, Jan. 1, 1961]
We advise all homeowners who have been noticed with denial of homestead
tax exemption and subsequent threats of back taxes and liens to
immediately contest the lien. We can help. If you would like more free
legal information regarding this issue then please contact us. We will
send you the information you need to challenge any denial of the tax
exemption and win. In the mean time, heed the warnings above and claim
your homestead by declaration!