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Homestead Exemption: Property Tax Exemption vs. Constitutional Protection from Creditors

Posted by Kristina Gonzalez | Jun 15, 2023

Oftentimes many debtors believe that because they have a homestead exemption claimed on their home for property tax purposes, that means that they may have constitutional protection of homestead against creditors. That is not the case. Homestead Exemption for property tax purposes and Homestead Exemption under the Florida constitution for protection from levy by creditors are two completely different benefits provided under Florida law.

A “homestead” is a person's principal residence within Florida that is no more than one-half acre of contiguous land in a municipality or no more than 160 acres in an unincorporated county. For homestead exemptions to apply, a person must intend to make the property their primary residence, must live in the property, and the property must be titled to the individual making the claim of homestead. A property owned by a corporation or other business entity cannot qualify for homestead exemption even if the owner of the business entity is living in the property as their principal residence.

 Florida Statute §196.031 provides for homestead exemption for property tax purposes. Under this statute, the homestead exemption reduces the assessed value of a homestead property by $50,000.00 for property tax purposes. To qualify for the property tax exemption, the individual must be the owner of the property, the property must be the individual's permanent residence, and the individual must have lived in the property as of January 1st of the calendar year when the application for homestead exemption occurs. The designation of homestead exemption for tax purposes does not prohibit aggressive creditors from attempting the forced sale of your home – it solely provides a break on property taxes.

How could a creditor attempt the forced sale of your home? Well, when a judgment creditor obtains a judgment against a debtor in a lawsuit, and that judgment is recorded in the public records of a county in Florida, the judgment then becomes a judgment lien that attaches to all real estate owned by the debtor in that specific county – even homestead property. Once the judgment lien attaches, it may be difficult to sell or even refinance the property without first paying off that judgment.

Luckily, when the property is your homestead property, Article X, Section 4 of the Florida Constitution clearly states that a judgment creditor cannot force the sale of the debtor's homestead to satisfy a creditor's money judgment. But, if the filing of a homestead exemption for tax purposes does not let a creditor know that the property they are trying to attack is “homestead” how will a creditor know that they cannot forcefully sell your home?

Florida Statute §222.01 provides us the steps that need to be taken to put a judgment creditor on notice that the property they are attempting to attach a judgment lien to is homestead. The Notice of Homestead process requires a written statement made by the property owner that said property is their homestead and therefore exempt from forced sale by creditors. The Notice of Homestead is then recorded in the public records of the county in which the property is located. The creditor then has 45 days to object to the Notice of Homestead. If no objection is made within 45 days, the property is deemed homestead and the judgment lien at issue will not attach to the homestead property. This means the judgment lien would not need to be paid upon the sale or refinance of the property and the creditor cannot foreclose against the property to satisfy their judgment lien. If the creditor does object, the creditor would be required to file a lawsuit and the court will then determine if the property qualifies as the debtor's homestead.

Remember, just because you have been granted homestead exemption for property tax purposes does not mean that you automatically have homestead protection from creditors seeking to lien or even levy your property. The key to preventing judgment liens against your homestead is to be proactive! Act promptly when you find out that a lawsuit has been filed against you to prevent the creditor from obtaining a judgment. If a creditor already has a judgment against you, it may be best to resolve the judgment now before a creditor tries to forcefully take your assets from you. Reach out to an experienced attorney who can assist you in deciding what the best course of action is for you. 

If you need assistance resolving a judgment lien or a debt collection lawsuit, contact the professionals at Holland Law Group today at (941) 744-5450. We offer a free consultation and are available to assist Floridians across the state, whether you live in Miami, Orlando, Tampa, Jacksonville, or anywhere else in between.      

About the Author

Kristina Gonzalez

Kristina is a native of Miami, Florida. Born to Cuban immigrant parents, she is the first in her family to go to college and obtain a law degree. She graduated in 2007 from the University of Florida summa cum laude with a Bachelor's Degree in English and Political Science. Kristina remained at th...

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