One of the biggest questions surrounding Florida land trusts is whether or not you can put your own home in one. As we’ve covered before, land trusts provide an element of privacy and additional flexibility for those who are managing and transferring real estate. There are some who have questioned whether or not homesteads should be permitted inside of land trusts because of Florida’s homestead exemption.
In this blog, we’d like to address common questions we hear from clients surrounding homesteads as they relate to Florida land trusts.
What is a Homestead and the Homestead Exemption?
A homestead is a property that you own and that stands as your permanent residence or the permanent residence of a dependent. Think of this as the “family home” or wherever you get all your mail and lay your head most nights.
The homestead exemption is essentially a tax reward that stems from owning your own home or owning the home of a dependent. Up to $25,000 of the first $50,000 in value of your home will be exempt for tax purposes as long as you owned the property on January 1st of the tax year. If the home is only worth between $50,000 and $75,000 then up to $50,000 of the home’s value can be exempt for tax purposes.
You only have to apply for this exemption once. After you’re approved, the exemption will be automatically applied for all tax years moving forward as long as you maintain ownership of the property and continue to live in it or have a dependent living in it.
Can I Place a Homestead in a Florida Land Trust?
The simple and straightforward answer here is yes! You can place your homestead in a Florida land trust without issue… but if you don’t execute the land trust properly you could lose the homestead exemption.
How Do I Preserve the Florida Homestead Exemption in a Land Trust?
You run the risk of losing that exemption under one circumstance: you don’t name yourself as the beneficiary. As we noted earlier this month, you can name yourself as the beneficiary of a land trust. If you aren’t the beneficiary of the land trust then you will not be able to claim the Florida homestead exemption.
Of course, this may all seem complicated for newcomers or those who aren’t sure how to properly establish a Florida land trust. That’s where Bryant Taylor Law comes in. Our team can guide you through this process and ensure you get all the advantages of a Florida land trust while also maintaining your homestead exemption eligibility. Schedule a consultation to get started.
Bryant Taylor
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