HOW DOES MY DIVORCE IMPACT MY HOMESTEAD EXEMPTION IN FLORIDA
Homestead exemptions are a unique quality to the Florida Constitution, and property taxation. The benefits that come with a homestead exemption can be extremely valuable to an individual and therefore, should not be overlooked in your divorce proceedings. Ensure your rights, and homestead exemption are considered during your divorce with an experienced attorney.
The main purpose of a homestead exemption is to protect property from liens by certain creditors and to receive reductions on your property taxes.
To qualify for a homestead exemption, you must meet certain standards. Within Florida, the homestead exemption covers only the home you hold out as your primary residence, and shelters up to one half acre within a municipality or 160 acres outside of a municipality and $1000 of personal property.
You must file a declaration of homestead prior to the levy by a creditor. Overall, the exemption protects your home from forced sale or levy by creditors, which provides you with the peace of mind, if you have a great deal of outstanding debts.
The most debated part of a homestead exemption in a divorce proceeding, the Florida Constitution prevents your assessed value of the homestead from increasing more than 3% each year for taxation purposes. This provides you with a great deal of tax savings over time. However, your homestead exemption may be impacted by your divorce. When you divorce, it is inevitable that at least one spouse will need to find new residence, if not both. Therefore, your property tax savings that accumulated over the time of your marriage with your marital property as well as your homestead exemption will be within a grey area.
Regarding the taxation savings, in the State of Florida, you are allowed to transfer up to $500,000 of the assessed value benefit from an old homestead to a new one. If both spouses are relocating to new homes, and the assessed values of each are higher than their prior homestead, this transfer amount can become a crucial asset, especially during negotiations. Florida law allows assignability of the transferable amount to each spouse. Therefore, you can assign a certain percentage of the amount to each spouse. However, this is only available if both spouses abandon the prior homestead.
If you are the only relocating spouse, it will be important to discuss the value of the homestead property tax exemption. If your new homestead is assessed at a higher property value, you will desire to carry over your exemption to the new property. However, this will not be available if your spouse is not abandoning the prior homestead as well. Therefore, it will be important to consider the amount in your negotiations as an asset that your spouse is retaining by staying in the home.
When entering a divorce, employ an attorney who does not overlook these assets. Contact an experienced attorney today, such as Raymonda Chakhtoura, Esquire, to protect your rights and assess the proper assets and value to your marital property.