State Lawmaker Among Many Bagged By Central Florida County Appraisers For Illegal Homestead Exemption Claim

In Hillsborough County, Florida, The Tampa Tribune reports:

• If you know somebody claiming an illegal homestead exemption, Hillsborough County wants to hear from you. The appraiser's office has rolled out an online reporting site to make tattling on double-dippers quick and easy.

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• So far in 2010, the county has placed 240 liens on homes for homestead abuse, representing just more than a million dollars, according to [Hillsborough County Property Appraiser Rob] Turner. Turner said after an anonymous online report is filed, county investigators will handle the rest of the investigation. [...] Those caught are required to repay the taxes back as far as 10 years. The state also tacks on a 50 percent interest penalty, which retroactively accrues at 15 percent.

• State lawmaker Janet Cruz is one of the most high-profile and costly cases. The county hit her with $32,000 in back taxes and fines this year after appraisers discovered she wrongly claimed a homestead at 4114 Empedrado St. in Tampa. Cruz repaid the taxes in full. "Nobody should get special treatment, including me," she said.

• Turner said so far his office has received more than 300 anonymous online reports of exemption abuse since online reporting began in February. Sixty people lost exemptions as a result, and 235 more are under investigation.(1)

For the story, see Appraiser fights homestead fraud.

In a related story, see Orlando Sentinel: Who's that talking to neighbor? Investigators hunt homestead tax cheats.

(1) See Office of the Inspector General, Miami-Dade County press release for an example of a case that lead to criminal charges that resulted in connection with making bogus tax exemption claims under the state homestead law.

Those in Florida interested in legally renting out their homes without losing/relinquishing their homestead tax exemption garnted under Article should be made aware of two exceptions in the statute, which I refer to as the "roommate" exception, and the "U.S. Armed Forces Servicemember" exception.

See Section 196.061, Florida Statutes treats the rental of an entire dwelling (as opposed to the rental of only a portion of the dwelling) previously claimed to be a homestead for tax purposes as an abandonment of said dwelling as a homestead. Accordingly, one taking in roommates need not be concerned with losing their tax exemption by reason of renting out a portion of the dwelling. This homestead abandonment statute also does not apply to U.S. Armed Forces Servicemembers.

• 196.061 Rental of homestead to constitute abandonment.--The rental of an entire dwelling previously claimed to be a homestead for tax purposes shall constitute the abandonment of said dwelling as a homestead, and said abandonment shall continue until such dwelling is physically occupied by the owner thereof. However, such abandonment of such homestead after January 1 of any year shall not affect the homestead exemption for tax purposes for that particular year so long as this provision is not used for 2 consecutive years. The provisions of this section shall not apply to a member of the Armed Forces of the United States whose service in such forces is the result of a mandatory obligation imposed by the federal Selective Service Act or who volunteers for service as a member of the Armed Forces of the United States.

But see, Karayiannakis v. Nikolits, 23 So. 3d 844; 2009 Fla. App. LEXIS 19251; 34 Fla. L. Weekly D 2534 (Fla. App. 4th DCA 2009) (homestead exemption for property tax valuation purposes held not applicable to entire 5-unit apartment building where property owner lived in one of the units and rented the other four units to tenants);

And, Haddock v. Carmody, 1 So. 3d 1133; 2009 Fla. App. LEXIS 354; 34 Fla. L. Weekly D 207 (Fla. App. 1st DCA 2009) (property owners not entitled to the tax exemption for homestead property where, in renting their condominium unit to others, they "carved-out" of the rental aggreement two closets for storing personal items that they maintained under lock & key and was not accessible to the tenants, in an attempt to fall within the "roommate" exception contained in Section 196.061, Florida Statutes).

Note that the foregoing only applies to homestead exemption determinations under Article VII, Section 6 of the Florida Constitution (relating to property tax exemptions for homestead property), and not to exemptions from forced sale for homestead property under Article X, Section 4, Florida Constitution.