Sunday, April 02, 2017

Miami Property Tax Official Threatens Homeowners w/ Loss Of Homestead Tax Exemption, Monetary Penalties, Possible Fraud Charges For Renting Out Their Homes On Airbnb For Over 30 Days/Year

In Miami, Florida, the South Florida Business Journal reports:
  • Miami-Dade County’s property appraiser raised an argument against Airbnb last week that likely few in South Florida had heard before: Use of the platform can constitute tax fraud.

    Property owners who receive Homestead Exemption and host on the home-sharing platform could lose their tax exemption and be subject to a penalty fee, states the advisory, issued Friday by county property appraiser Pedro Garcia.

    In an interview with the Business Journal, Garcia explained that in Miami-Dade County Homestead Exemption caps annual property tax rates for primary residences at 3 percent, aiming to shield certain homeowners from rising taxes.

    However, state statutes state the exemption no longer applies if the residence — even just one of its bedrooms — is rented out for more than 30 days in a year. The property owner is also subject to a penalty fee of 50 percent in back taxes with 15 percent interest tacked on.

    “Homestead exemption is for people who live in that particular house … so they can pay a smaller amount of property taxes,” Garcia said. “But if they start renting … and if they go above the 30-day limit, they’re committing homestead fraud. You can make your own decisions, but be careful.”

    About 6,800 properties in Miami-Dade County were available on the Airbnb platform in 2016. According to ads by the San Francisco-based company, 66 percent of Miami-Dade hosts use the money they make by renting out their homes to pay their rent or mortgage.

    “When I see so much talk about Airbnb and ads from them to encourage people to use the service, it could be motivating people to make a mistake,” Garcia said.

    Airbnb spokesman Ben Breit said the home-sharing platform, similar to homestead exemptions, “empower the middle-class” by providing an alternative income source for homeowners.

    “Most places recognize a homestead exemption was established to let middle-income homeowners keep their homes,” Breit wrote in an email.

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