GREEN COVE SPRINGS – One of the responsibilities of the Clay County Property Appraiser’s Office is to ensure that all eligible property owners receive the full benefit of those exemptions, …
GREEN COVE SPRINGS – One of the responsibilities of the Clay County Property Appraiser’s Office is to ensure that all eligible property owners receive the full benefit of those exemptions, reductions and classifications to which they are entitled.
Conversely, property owners who are improperly or fraudulently receiving tax exemptions are problematic and create inequity within the assessment roll and tax base. In the end, honest taxpayers are left with making up the difference that property owners who are improperly receiving or fraudulently claiming a tax exemption create.
Florida law provides for many property tax exemptions that will reduce the taxable value (and taxes) of real property; the most common is homestead exemption. Every person who owns real estate in Florida makes the property his/her permanent residence as of Jan. 1, and files an application with the property appraiser, may be eligible to receive a homestead exemption.
Applicants must establish and maintain proof of permanent residency. Once a homestead exemption is granted, it is renewed every year. Therefore, a subsequent application to maintain the exemption is not required.
Homestead exemption is much more than just a taxable value reduction, as it can protect against large assessment increases. In 1992, Florida voters approved the Save-Our-Homes Constitutional Amendment, thereby limiting the annual increase in the assessed value of properties with a homestead exemption to no more than 3% a year. If a property’s market value exceeds the annual increase limitation amount allowed for the assessed value, the difference between those values becomes the SOH assessment differential, which is non-taxable. The SOH assessment differential benefit begins the year after a homestead is granted and can accumulate to a significant property tax savings.
As of July 1, the countywide SOH assessment difference is more than $6.5 billion.
Due to the automatic annual renewal and the tremendous benefits of a homestead exemption, Florida law requires property owners to notify the property appraiser if exemption eligibility has changed – and there are severe penalties if not reported. Pursuant to Florida Statutes, the property appraiser may review the exemption status for any current or prior year for up to 10 years and shall file a tax lien against any property determined to be improperly or fraudulently claiming a homestead exemption. Such property shall be subject to the taxes owed due to the ineligible exemption, plus a penalty of 50% of the unpaid taxes for each year and 15% interest per year.
More than 56,500 parcels are receiving homestead exemption in Clay County and more than 5,000 new applications are received each year. Although the CCPAO has the ability and capacity to process new applications and investigate individual cases of possible homestead ineligibility, a systemic review of all existing exemptions is not plausible.
Therefore, the CCPAO partnered with TrueRoll, an independent research firm, to conduct a homestead exemption audit. The audit was intended to confirm exemption eligibility and certify that all property owners pay their fair share – no more, no less.
During the past 18 months, all existing homesteads in Clay County were reviewed for compliance. After much investigation and research, 190 tax liens were filed, resulting in more than $55 million in taxable value and $1.4 million in potential tax revenue. To date, 117 tax liens (61.57%) have been satisfied, equating to more than $750,000 in property taxes recovered.
All property owners have an interest in protecting the homestead exemption benefits. Although the CCPAO will proactively monitor for homestead exemption compliance, exemption abuse can be reported at www.ccpao.com/report-exemption-abuse.
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