Hello and welcome to 60 Seconds with Sergio.
I am your host, Sergio Cabanas, Attorney-at-Law here in Florida.
Thank you for joining me today.
Today’s question is: “Sergio, my spouse and I are getting a divorce, however, we’ve lived in our house for a number of years, during which time I was able to exercise what’s called a “save our homes” exemption.”
“Which kind of helps cap our tax liability for property taxes purposes.”
“And now I wonder, what would happen in the event of a divorce?”
“Will I lose this very valuable tax exemption?”
Well, first of all let me commend you for even realizing that exists.
And the reason you’re watching this video is to get an answer to something that’s often overlooked.
So, let’s clarify the question a little more.
Let’s suppose you own a home in Florida.
And you’ve held the property for a number of years as your primary homestead.
Well, under Florida law, you are allowed to cap your liability for increases in taxes every year.
After you exercise your right to the homestead exemption.
So, let’s suppose that you buy your house in year 1 and the tax assessors appraises the just market value of your property and you’re taxed accordingly in year 1.
Now, for every year thereafter, by law, the property appraiser can not raise the taxes on that property more than 3% or higher than the Consumer Price Index whichever is lower.
So, getting back to the question.
What happens to this very valuable tax exemption, or tax benefit, in the event of a divorce?
Well, the answer depends on what happens to the marital home, this homestead.
If the parties agree to sell the property, or the court orders the sale of the property, then normally, this “save our homes” exemption is divided between the parties, and they go off and use it on their new homes.
Basically split 50-50 like any other asset.
But what if one of the spouses ends up keeping the marital home?
Ah! That’s when it becomes interesting.
Unless the party specify otherwise, the spouse that remains in the marital home ends up getting the entire tax exemption.
So, what can you do to avoid this situation?
Or at least negotiate it in a way that the parties intend.
Well, it has to be carefully considered.
And the parties can actually agree how to handle the “save our homes” benefit.
Even in cases where one spouse ends up with the marital homestead, the parties can still agree to split up “save our homes” exemption amongst them.
But, the one that keeps the marital homestead has to be ready for that liability for the taxes to be readjusted the following year.
So, even though the spouse ends up with the marital home, and the parties agree to share or split that “save our homes” tax exemption, the one that’s remaining with the marital homestead may expect an increase in their taxes the following year because the property appraiser will probably readjust it to the current fair market value, according to the property appraiser’s office.
So, again, all of these issues have to be carefully considered in a divorce.
I hope this short video provided you some guidance over what could be a potentially complicated and important issue in your divorce.
Thank you again for joining me today. And as always, stay informed so you can stay strong.
Hello and welcome to 60 Seconds with Sergio.
I am your host, Sergio Cabanas, Attorney-at-Law here in Florida.
Thank you for joining me today.
Today’s question is: “Sergio, my spouse and I are getting a divorce, however, we’ve lived in our house for a number of years, during which time I was able to exercise what’s called a “save our homes” exemption.”
“Which kind of helps cap our tax liability for property taxes purposes.”
“And now I wonder, what would happen in the event of a divorce?”
“Will I lose this very valuable tax exemption?”
Well, first of all let me commend you for even realizing that exists.
And the reason you’re watching this video is to get an answer to something that’s often overlooked.
So, let’s clarify the question a little more.
Let’s suppose you own a home in Florida.
And you’ve held the property for a number of years as your primary homestead.
Well, under Florida law, you are allowed to cap your liability for increases in taxes every year.
After you exercise your right to the homestead exemption.
So, let’s suppose that you buy your house in year 1 and the tax assessors appraises the just market value of your property and you’re taxed accordingly in year 1.
Now, for every year thereafter, by law, the property appraiser can not raise the taxes on that property more than 3% or higher than the Consumer Price Index whichever is lower.
So, getting back to the question.
What happens to this very valuable tax exemption, or tax benefit, in the event of a divorce?
Well, the answer depends on what happens to the marital home, this homestead.
If the parties agree to sell the property, or the court orders the sale of the property, then normally, this “save our homes” exemption is divided between the parties, and they go off and use it on their new homes.
Basically split 50-50 like any other asset.
But what if one of the spouses ends up keeping the marital home?
Ah! That’s when it becomes interesting.
Unless the party specify otherwise, the spouse that remains in the marital home ends up getting the entire tax exemption.
So, what can you do to avoid this situation?
Or at least negotiate it in a way that the parties intend.
Well, it has to be carefully considered.
And the parties can actually agree how to handle the “save our homes” benefit.
Even in cases where one spouse ends up with the marital homestead, the parties can still agree to split up “save our homes” exemption amongst them.
But, the one that keeps the marital homestead has to be ready for that liability for the taxes to be readjusted the following year.
So, even though the spouse ends up with the marital home, and the parties agree to share or split that “save our homes” tax exemption, the one that’s remaining with the marital homestead may expect an increase in their taxes the following year because the property appraiser will probably readjust it to the current fair market value, according to the property appraiser’s office.
So, again, all of these issues have to be carefully considered in a divorce.
I hope this short video provided you some guidance over what could be a potentially complicated and important issue in your divorce.
Thank you again for joining me today. And as always, stay informed so you can stay strong.
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