March 25, 2013
A Florida proposal seeks to limit the number of days per year a homestead property can be rented without adversely affecting the homestead status of the property. The proposed bill allows the rental of a homestead property for up to 30 days in a year. If a homestead property is rented for more than 30 days for two consecutive years, the property will be considered abandoned as a permanent residence and the homestead tax exemption will be lost.
Current law bans homeowners from leasing their property for two consecutive years, but there is not a specific amount of time an owner must live in the property to keep their homestead exemption. Florida courts traditionally determine the abandonment of homestead property on a case-to-case basis. The proposed change would allow properties to be rented for fewer than 30 days per year for two consecutive years. Homes rented for more than 30 days per year for two consecutive years could potentially lose the homestead tax exemption.
Many Floridians rent out their residences seasonally and for special events, such as art festivals, business conventions and sporting events. By doing so, they don’t necessarily intend to abandon their residence’s homestead status. While the proposed bill limits the number of days per year a home can be rented, it allows homeowners to rent out their property for consecutive years, without losing tax exemption status. This affects homeowners who rent out their homes for short periods of time on do-it-yourself vacation sites and those who intend to rent out their homes for specific, yearly events. If the bill is passed, homeowners wishing to rent for more than the allotted 30 days and keep the tax exemption would have to do so every other year.
The material on this website/blog is for informational purposes only and does not constitute legal or tax advice. The material does not necessarily reflect the opinions of The Seaside Group at Douglas Elliman or any of its associates, employees or affiliates, and is not guaranteed to be correct, complete, or up to date. Please consult your own tax professional or legal counsel for advice.
