The short answer is YES. Rental for more than 30 days for two consecutive years, OR for more than six months, constitutes abandonment of a homestead exemption. What if I rent out a portion, say a room a guest house or an in law suite, of my homesteaded property?
This is the new wrinkle. THE FL SUPREME COURT RECENTLY ISSUED A RULING IN FAVOR OF THE TAX COLLECTOR. At the heart of this NEW case law is that Florida statutes property tax provisions define real estate used and owned as homestead to mean real property to the extent provided in the Florida Constitution, less any portion used for commercial purposes and specifically states that property rented for more than 6 months is presumed to be used for commercial purposes. The tax collector estimated, in this case, that 15% of the property was rented out (and was for the EXCLUSIVE use of the Tenant), producing income, for more than 6 months in a year, and therefore was being used for commercial purposes. They sent the Owner a bill for X Years of the 15% that was NOT covered by the homestead exemption, plus interest and penalties of course. And the supreme court of Florida agreed with the tax collector.
Thus, if you were to say rent out a 500 SF (square foot) room in the house you’re living in or a 500 SF Accessory Dwelling Unit, and your total square foot under air were say 3000 SF then the tax man could remove the homestead exemption on 500 SF of your 3000 SF.
According to the Florida Statute….
196.061 Rental of homestead to constitute abandonment
(1)The rental of all or substantially all of a dwelling previously claimed to be a homestead for tax purposes shall constitute the abandonment of such dwelling as a homestead, and the abandonment continues until the dwelling is physically occupied by the owner. However, such abandonment of the homestead after January 1 of any year does not affect the homestead exemption for tax purposes for that particular year unless the property is rented for more than 30 days per calendar year for 2 consecutive years.
Thus, if you rent out “all or substantially all of a dwelling” (not just a room but you can not keep just say a closet) for more than 30 days per calendar year for 2 consecutive years then you would not be eligible for the Florida Homestead exemption.
The Palm Beach County Property Appraiser has this to say…
Rental of a Homesteaded Property*
You may rent your homesteaded property for 30 days or less per calendar year and maintain a homestead exemption. Rental for more than 30 days for two consecutive years or for more than six months constitutes abandonment of a homestead exemption. Exempt property rented after January 1 of any year does not affect the homestead exemption for that particular year. If the property is rented on January 1 of the following year or the terms of the lease are six months or more the exemption will be denied. Property owners are required to notify the Property Appraiser’s Office when their property no longer qualifies for exemption. Failure to do so could result in a Homestead Tax Lien with substantial penalty and interest. *Florida Statute 196.061 and 196.011 (9) (a). Please call our Exemption Services at 561.355.2866 for more information.
