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Why The Homestead Exemption In Florida Is Important

by Paradise Home Finders, LLC 03/13/2019

When you buy a home in Florida, you may wonder what the protections are for homeowners in the state. This exemption is incredibly valuable. A homestead protects your property from being used in a judgment by creditors. A creditor can force the sale of your home to satisfy a judgement made against you unless you have this protection in place. Florida courts have expanded the definition of what is classified as a homestead to include properties not limited to single family homes. Condos, manufactured homes, and mobile homes also are under the umbrella of the homestead protection law. 


What Qualifies For A Homestead?


Principal place of residence

From 1/2 an acre to 180 acres


What does not qualify as a homestead?


Second homes

Irrevocable trust properties

Investment properties

LLCs

Partnerships

Homes on a leased lot


*Living trust and land trust properties can be qualified as homestead properties.


The homestead protection tool is powerful as an asset protection tool for you, which is why you should understand the protections it carries. The full value of your property investment will be protected. 

A person may even transfer unprotected assets to their homestead through buying a new home or reducing the principal balance of the home. The money should not be transferred fraudulently, however. A creditor can foreclose on a homestead property if they can prove that the money was obtained fraudulently by the debtor and the money was reinvested in the property in order to hide the funds.     



When Does Protection Begin?


Protection for a homestead property begins the day that the property is first occupied to make the home your permanent Florida residence. There is no waiting period for the protection to begin. There also are no papers to file or no forms to fill out to gain this protection. The only thing you must know is if your property will qualify for the Florida homestead act.


For example, while modular homes and trailers are covered under the act, they are not covered if they are placed on leased land. You must own the land for the protection to be active for you.


If one owner of a property does not reside in Florida, your protections may be in jeopardy. Both owners of a property must be permanent Florida residents for the homestead act to remain active and valid. 


Civil judgments that were filed against you before you occupy the Florida property also do not apply for you to be protected in the event of a civil suit.         


The Homestead Exemption Act in Florida is a great financial protection that is available to most Florida home buyers. It’s good to be aware of these securities in the event that you do face a civil suit in the future. It’s a relief to know that your property is safe.

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Paradise Home Finders, LLC
Hi, We're Paradise Home Finders, LLC and we'd love to assist you. Whether you're in the research phase at the beginning of your real estate search or you know exactly what you're looking for, you'll benefit from having real estate professionals by your side. We'd be honored to put our real estate experience to work for you.