Skip to Content
Call Us Today! 888-444-9568

Tourists & Taxes: The Effects of Rental on Homestead Property

Homestead exemption

Florida homestead is a three pronged benefit, which provides Floridians with both tax benefits and creditor protections. Specifically, there is an exemption which reduces taxable value of the property by as much as $50,000, as well as a cap on increases in value from one year to the next, commonly referred to as the “Save Our Homes” cap. The third benefit is the protection of the home from creditors liens. To qualify for Florida homestead, the home owner must use the property as their permanent residence, and have the intent to return if they leave. But in Florida, where many people only live in state part-time, and many open their homes as a place for tourists to stay during season, the determination becomes more difficult. For those individuals, the right to Florida homestead is one they may have to be prepared to defend, as counties take very seriously the loss of revenue from those claiming fraudulent homestead.

As a general rule, a property owner is entitled to homestead if the property is their permanent residence on January 1st of the applicable year. Section 196.015 of the Florida Statutes provides a list of the common indicators of permanent residence. These factors include, in relevant part, the address on the resident’s voter registration, driver’s license, motor vehicle registration, federal returns, bank statements, and proof of payment of utilities. The ownership of a second property, in Florida or outside Florida, which is also inuring the benefit of a residency based tax exemption, is the fastest way to lose the Florida homestead benefits on a Florida property.

Rental of a property can also lead to loss of homestead when that rental is tantamount to “abandonment” of the homestead. The abandonment of homestead for short term rentals and partial rentals is codified in Section 196.061 Florida Statutes, which identifies abandonment involves 1) a rental 2) of the “entire dwelling” 3) on January 1st. The definition of rental is simple; it is the act of giving possession of the property to another. The rental of the “entire property” is a fact based determination. The owner must keep a part of the property for their own use. This portion of the property must be more than de minimus. The facts weigh in the property owner’s favor if the portion of the home retained shows the intent to return to the dwelling. Furniture, clothing, personal effects all left in a room retained for the owner would likely be sufficient to indicate the intent to return, and thus defeat an argument that there was rental of the “entire dwelling.” For properties that are subject to long term rental in part, the rented portion can be treated as a pro-ration of the property for tax purposes. For example, a duplex owned by a homeowner, where one side is the owner’s residence, the other side a rental, the property would be 50% subject to the homestead benefits, while the remaining half would be treated as commercial. Commercial properties have a 10% cap on increases each year, but are not entitled to the other benefits which apply with residential property.

Recently, however, a property appraiser’s office in Florida informed the author their position is that rental of the property, even partial rental, can be grounds for the loss of the Save Our Homes cap on increases to property value for the entire property. In determining if a property is rented, the property appraiser’s office can pull data from other government agencies to verify the factors listed above. Specifically, voter registration, driver’s license, motor vehicle registration and utilities provided by the county or municipality are all data that the property appraiser’s office can review to verify the common indicia of residency during the course of investigation. A renter, or a roommate, who pays utilities, or registers their car at the homeowner’s house could be inadvertently triggering a homestead audit.

For the property appraiser to threaten the constitutional right to the “Save Our Homes” cap on value based on rental is baseless, and also very dangerous. The law does not support this position, but an uninformed property owner could easily end up with an assessment in the tens, or even hundreds, of thousands of dollars. A property’s loss of the cap can go back ten years, and given the over inflation of real estate during the bubble, those values can be very high. The homeowner would be forced to hire legal help to represent them defend their right.

Before renting out your home, be informed of the potential ramifications. If you already rent your home, and have been contacted by the local property appraiser, it is crucial to know your rights. Hiring council who deals with these issues will help prevent the loss of your right to the benefits of homestead.

Florida Property Tax Attorney; Florida Property Tax; Florida Homestead Exemption; Florida Tax on Home Rentals; Florida Sales Tax Attorney; Florida Sales Tax Audit; Florida Sales Tax Audit Defense

About the author: Ms. Levine is an associate attorney with the Law Offices of Moffa, Sutton, & Donnini, P.A. Her primary practice area is Florida tax controversy, with focus on real property issues. Ms. Levine received a B.S. in Accounting from University of Central Florida. She spent several years working in public accounting before attending Nova Southeastern University Law School. She received her Juris Doctorate in 2014. During her time at Nova Law, Ms. Levine was the Executive Justice of Academics for the Moot Court Honor Society, as well as the Finance Chair. She was awarded by the National Order of the Barrister, a national honor society which encourages oral advocacy and brief writing skills. You may contact Amanda via email at or 954-642-1088 or read more about Amanda in here BIO HERE.

Additional Resources

Florida Homestead Tax Exemption Case – Mary Jane, published March 15, 2015, by Amanda Levine, Esq.

Miami-Dade Property Owners Take on Tax Collector, published on Apr 11, 2015, by Amanda Levine, Esq

Burden of Proof-Persuasion: FL Ad Valorem Tax, published Aug 3, 2015, by James McAuley, Esq.