Advantages of Retiring in Florida

There are many advantages of retiring in Florida. The sunshine state has more to offer than the warm weather and magnificent beaches. Depending on what state you are currently living in, the home prices and tax advantages will most probably convince you to start packing. If you need more convincing, consider the tax advantages of living in Florida. Florida is one of only 7 states that do not collect any individual state income taxes. Perhaps this is another reason for many residents of northern states to choose Florida for their retirement. This could become a deciding factor considering the fact that most retirees are destined to live with less income during their golden years.

Property Taxes

However, Florida collects property taxes from homeowners. The property taxes can be lowered for full-time residents through the State’s Homestead Exemption Programs. For a list of other exemptions please refer to the Property Appraiser Office’s website where the home is located.

Property Tax Advantages in Florida

There are different sets of laws designed to protect homeownership in Florida while offering great tax savings:

Florida Homestead Exemption

The Homestead Exemption in Florida is considered as one of the best and broadest of its kind in the nation. The exemption is available only for primary and permanent residents. Every new homeowner has to apply to obtain a Homestead Exemption. The application must be filled with Property Appraisers’ Office in the perspective county. The homestead exemption not only reduces the property tax burdens but also offers protection against creditors. There are some exceptions to law> Lenders who hold the mortgage on the house can foreclose for non-payment of the mortgage. The tax saving is calculated by deduction up to $50,000 from the assessed value of the property.

Florida Constitution and Homestead Exemption Law

The laws covering the homestead exemption is part of the Florida constitution and cannot be removed without amending the constitution. This constitutional right offers almost complete protection from forced-sale to compensate creditors. The incredible level of protection against creditors has brought many people who are heavily in debt in other states to Florida. The most recognizable example is OJ Simpson who resides in Florida.

Florida Save Our Homes (SOH) Law

The Save Our Home law took effect in 1995 in Florida. The law is based on a cap of a maximum of 3% or the change in the Consumer Price Index, whichever is less. The cap applies to the assessed value of the home, which is calculated by the local Property Appraiser’s Office.

Portability of the Florida Homestead Exemption

Another great saving in property taxes is the portability law. This law offers savings for owners who sell their homestead and acquire another one. The homeowners are entitled to carry the saving they have enjoyed through SOH Law to their new resident. The saving is calculated by deducting the Assessed Value from Market Value. For example, if the old residence had a Market Value of $200,000 and an Assessed Value of $170,000 there is a $30,000 difference in the taxable amount. The homeowner is entitled to deduct $30,000 from the Assessed Value of their new homes as long as it is their primary residence.