Homestead Tax Considerations When Renting Your Home in Florida

By Naples Attorney Zachary W. Lombardo

There are tens of thousands of listings on Airbnb, Vrbo, and other rental platforms throughout Florida. If you are considering renting your home out, or if you already rent your home out, that may impact your homestead protections and, correspondingly, result in increased property taxes.

Recent Case Provides Guidance on Renting Your Home
The Florida Supreme Court’s recent holding in Furst v. Rebholz provides guidance on the impact of renting your home on homestead protections. The Supreme Court held the Florida Homestead Tax Exemption and the Florida Save Our Homes Exemption could be reduced by a property appraiser if part of a home is rented out for commercial purposes.

Florida Homestead Tax Exemptions
The Florida Homestead Tax Exemption is a state constitutional benefit that allows homeowners who meet specific criteria to reduce the taxable value of their primary residence by up to $50,000 for certain taxes. To qualify, the homeowner must have owned and occupied the property as their primary residence on January 1st of the tax year.

The Florida Save Our Homes exemption is a Florida law that limits the amount of annual assessed value increases to the lesser of 3% or the percentage change in the Consumer Price Index (CPI), for homesteaded properties. This exemption provides protection to homeowners from significant property tax increases when the value of their homes appreciates.

The above two protections can result in significant tax savings for homeowners.

Potential to Lose Homestead Tax Exemptions
In the Furst case, a property owner rented out a portion of his house and lived in the rest. The property appraiser discovered this and concluded that because some percentage of the property was being used for commercial purposes, specifically a rental, the homestead tax exemption and the save our homes exemption did not apply to that percentage of the property.

The Florida Supreme Court has affirmed this analysis but made a few distinctions: 1. The analysis employed does not apply to work-from-home scenarios, and 2. Because of property divisibility issues, the holding does not apply to the homestead protection of real estate from creditors.

Another important distinction is arguably that in the Furst case, the portions of the house were rented out for full-year periods. This is important because many rent out their entire home, but only for a small percentage of the year. Arguably, because the homestead protections apply to an owner’s primary residence, that status is not lost if the owner, for example, goes on a trip and rents out their home while away. If, however, an entire portion of a home is rented out all year, that portion is not your primary residence.

About the Author
Zachary W. Lombardo is a Naples native and an attorney at Woodward, Pires & Lombardo, P.A. His Juris Doctorate is from the Florida State University College of Law. He focuses his land use, zoning, business, contract drafting, and litigation practice in the Southwest Florida community.

Zach has successfully represented and guided clients in land use and local government matters, including advocating for as well as objecting to comprehensive plan amendments, re-zonings, variances, conditional uses, and non-conforming uses before the Marco Island Planning Board, the Marco Island City Council, the Collier County Planning Commission, the Collier County Hearing Examiner, and the Board of County Commissioners of Collier County. He also has experience in property tax appeals, code enforcement and appeals of code enforcement matters. In addition, he has represented and guided clients on matters involving public records, including litigation.

Zach guides clients in environmental concerns and issues involving state lands, including environmental resource permits and sovereign land leases before state agencies and in litigation. Zach also serves as board counsel to the City of Everglades City Planning and Zoning Committee and represents the firm’s various municipal and special district clients.

Woodward, Pires & Lombardo, P.A.

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