This is a great question. And it is a common one too. We all have heard of property taxes, when you own a piece of property, the Property Appraiser determines the market value, also called Just Value, of the home. When you take your Just Value and subtract any of the Exemptions, this gives you your Assessed Value. This determines how much your property taxes will be from the various municipalities and taxing districts.

There are many different taxing entities. For instance, in Marathon, we will have the City of Marathon, the Monroe County School District, Mosquito Control District, State of Florida, Water Management district and more who charge taxes based on the Assessed Value.

The Homestead Exemption does a couple of things here. First, it requires that you actually live in the house on January 1 of the year that you are claiming the exemption. It also has to be your primary home, which means you cannot rent it out if you are claiming the exemption. There are significant penalties for any homeowner who claims an exemption that they do not qualify for.

The Exemption will provide you a reduction in the Just Value of $25,000 and up to $50,000, it also provides that your Just Value will not increase more than 3% per year. The exact language from the State of Florida website is:

“Every person who owns and resides on real property in Florida on January 1 and makes the property his or her permanent residence is eligible to receive a homestead exemption up to $50,000. The first $25,000 applies to all property taxes, including school district taxes. The additional exemption up to $25,000, applies to the assessed value between $50,000 and $75,000 and only to non-school taxes.”

Let me show you an example from a tax bill.

Tax example

You can see here the reduction in the assessed value and how it makes a huge difference in the amount of taxes owed.

I think it is important to point out that this only applies to Ad Valorem taxes. There are also Non-Ad Valorem taxes on everyone’s tax bill for “Waste” which is your garbage pick up bill, in Marathon, we also have a “Stormwater” bill for $120 and you may have a “Marathon Wastewater” bill for a financed Sewer Development Fee. These will NOT be affected by any exemptions.

For more information on exemptions, check out these resources:

Florida Homestead Exemption PDF

State of Florida Department of Revenue

Monroe County Property Appraisers office

Monroe County Tax Collector

About the author

Derrick Johnson

Derrick Johnson

REALTOR®

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