Thursday, April 20, 2017

Search Continues For Florida Property Owners Claiming Fraudulent Homestead Exemptions To Score Improper Real Estate Tax Discounts

In Jacksonville, Florida, the Jacksonville Daily Record reports:
  • If you are falsely claiming a homestead exemption, the Duval County Property Appraiser is looking for you. And it’s getting harder to hide.

    Since 2015, the appraiser’s office has filed nearly 1,000 liens for $5.1 million against property when owners claimed fraudulent homestead exemptions – and $3.1 million has been collected. “We’ve been very productive,” said Jerry Holland, property appraiser.

    Liens average about $5,000. The largest — more than $158,000 — was filed on waterfront property along Aladdin Road in Mandarin — while the smallest is $9.45.

    Under Florida Statute 196, the homestead exemption gives a tax discount on a homeowner’s primary residence by allowing $50,000 of the market value to be exempt from property taxes and $25,000 exempt from school taxes.

    Owners are entitled to the exemption if, on Jan. 1 of each year, they have made the property their permanent home or the permanent home of a person who is legally or naturally dependent on them.

    It’s fraud when a homeowner claims the exemption when the property isn’t their primary residence, or when the property is used as a rental or when rented as a vacation home for part of the year.
    ***
    If a property owner is caught, in addition to the back taxes that weren’t paid based on the exemption, there is a 50 percent penalty added and the full tax bill can be collected for as far back as 10 years if that’s how long it is determined the exemption has been improperly claimed, Holland said.

    He said when he took over the office in 2015, there was a backlog in the homestead fraud investigation department brought on by several years of city budget cuts that forced staff to work on the issue only part-time.

    He has since re-organized the office and now has a team dedicated solely to searching out improper exemptions.

    About two months ago, a third-party collection service was added to the fraud investigation effort. “They are able to cross-reference property records in other states. They find the ones we can’t find,” Holland said.

    The company receives a 28 percent commission on what it collects and the Duval County Tax Collector gets 2 percent of the back-tax collection. “Getting 70 percent of anything is better than getting 100 percent of nothing,” Holland said.

    The office has also hired a former Osceola County sheriff’s deputy who has been designated a reserve officer by the Jacksonville Sheriff’s Office to help the investigations.

    Holland said there’s no intent to arrest anyone for homestead fraud, but when a police officer contacts a jurisdiction outside Duval County seeking property records, it’s easier to get answers quickly. "She has a badge. It does give us an edge,” Holland said.

    Of the about $3 million that has been collected since the crackdown began, some people took a check to the tax collector soon after they were notified of the lien.

    Monthly payment plans are available if the property owner can’t resolve the entire balance immediately — but that comes with 15 percent annual interest on top of the back taxes and penalty.

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