Creditor Protection and Tax Benefits of Homestead in Florida

Authored by:

bishop toups attorney

Bishop guides clients with their various estate planning needs and helps them navigate the Medicaid system in Florida. Bishop also represents clients worldwide in front of the IRS. Bishop is also a V.A. accredited attorney and helps Veterans obtain benefits from the Department of Veterans Affairs.

Reviewed by:

Kerven Montfort

Kerven began his legal career as a criminal law attorney and was an assistant prosecutor for 7 years. Prior to joining Daily, Montfort, and Toups, Kerven served as the General Counsel for Florida’s Department of Military Affairs, where he was the chief legal and ethics officer for the state agency.


Making your primary residence in Florida your homestead provides you with both tax benefits and an unlimited creditor protection against most creditors/lawsuits. This Article will cover the basics of Florida Homestead and the great benefits of making your primary residence your Homestead.

What is Considered Florida Homestead?

In order to make your home in Florida your Florida homestead and to receive all of tax and creditor benefits, you must meet the following qualifications:

  1. The Homestead must be owned by a natural person (e.g. an LLC cannot qualify for homestead exemption);
  2. The homeowner must intend to make the real property his or her permanent residence; and
  3. The home must meet certain size requirements depending on its location.

When all three of these criteria are met, your home will be considered a Florida homestead and you will receive an unlimited creditor protection against most creditors and you will receive yearly tax benefits. Florida’s homestead protection against creditors stems from the Florida constitution and is one of the best ways to protect your most important asset—your home.

Note: You do not have to own the entire home for the home to be considered your homestead in Florida — a partial ownership interest can qualify as homestead. For example, you can own 50% of a home here in Florida and it will be considered your homestead if you intend on making the property your permanent residence.

What Are the Florida Homestead Tax Benefits Homestead?

There are two major tax benefits you receive by making your primary Florida residence your Homestead:

  1. an ad valorem real property tax exemption, and;
  2. a limitation on annual increases in property tax valuations.

The ad valorem real property tax exemption means that your homestead will provide you with up to a $50,000 discount on the assessed property tax valuation of your property. For example, let’s say your property is valued by your county’s property appraiser at $500,000 for property tax purposes. The $50,000 discount would mean that the value of your property for property tax purposes will drop to $450,000. This equates to roughly a savings of around $1,000 per year.

The limitation on annual increases in property tax valuations is a much more important benefit than the ad valorem tax benefit because the annual increase in your Homestead’s assessed value is limited to 3% or the amount of the change in the Consumer Price Index, whichever is lower. For example, let’s say your $500,000 property increases in value by $100,000 in one year. The county property appraiser would only be able to increase the assessed value of your home by a maximum 3% (or even lower if the change in the CPI for that year is less than 3%). Practically speaking this means that as your Homestead appreciates in value over time your property taxes will not drastically increase year to year.

Example: Joe buys a Florida homestead in 2021 worth $800,000 and makes Florida his permanent residence. Joe declares his property to be his homestead for 2021. Joe will receive a $50,000 ad valorem discount on his property tax valuation for 2021 so his assessed value for property taxes will only be $750,000.

More importantly, Joe’s home appreciates by $300,000 in the first year. The change in CPI for 2021 was only 1.4%. This means the property appraiser can only raise Joe’s assessed value for his property taxes by 1.4% on his homestead for 2021. This will result in huge savings for Joe on his property taxes each year.

Which Creditors Can Defeat Florida Homestead Creditor Protections?

The short answer is that your Florida homestead has an unlimited creditor protection against the vast majority of creditors. For example, if you’re in a car accident and get sued, the creditor will not be able to come after your Florida homestead since it will be completely creditor protected.

The homestead however is not protected against every creditor.  The Florida constitution provides three exceptions where a creditor can successfully come after a Florida homestead:

  1. Taxes or assessments;
  2. Mortgages; or
  3. Improvement or repairs performed on the homestead.

These are the only three constitutional exemptions to the unlimited creditor protection of the Florida homestead. If a creditor does not fit into one of these three constitutional exemptions, then the creditor cannot come after your protected Florida homestead.

Example: Joe hits and kills a bicyclist while riding down 4th Street in St. Petersburg, FL. Joe is sued and the bicyclist’s estate obtains a $4 million dollar judgment against Joe. Joe’s only asset his large $4 million dollar mansion overlooking the water in downtown St. Petersburg. Joe has been living in this mansion for the past twenty years and it is considered his Florida homestead.

Result: Since the creditor claim resulted from a car accident, the creditor’s claim does not fit into one of the three constitutional exemptions that can defeat the unlimited homestead protection. The bicyclist’s estate will not be able to touch Joe’s $4 million dollar mansion.

Do I Need to Live in My Florida Homestead Year Round to Qualify for Florida Homestead?

The answer is no, you do not need to live year round in your Florida home for it to be considered your homestead. The standard is that your absence must be temporary and you have an intent to return home to your Florida homestead. However, there are a number of factors that courts will look at to determine whether your property here in Florida is your homestead. Some of these factors include:

  1. Do you spend the majority of your time living in your Florida homestead?
  2. Do you use your Florida address on all significant documents and records (e.g. automobile registration, tax returns, etc.)?
  3. Which state did you open your primary bank and investment accounts?
  4. Are you active in the surrounding community?

Tip: You can file a declaration of domicile form with your local county’s recorder’s office that will help show your intent to make your Florida home your homestead. The declaration of domicile form will usually be available for free on your county clerk’s website.

Can Boats, Recreational Vehicles, and Mobile Homes Qualify as Protected Florida Homestead?

Boats, RVs, and Mobile Homes can qualify as protected Florida homestead and defeat creditor claims depending on the facts and circumstances. For example, if the boat is a houseboat where you live and you consider the houseboat to be your permanent residence, then the boat can qualify as protected homestead.

Note: If you might have potential creditor issues and you live in your boat, RV, or mobile home, we recommend seeking legal advice as to whether your boat, RV, or mobile home qualifies as protected homestead.

Will a House in My Revocable Living Trust Qualify as Florida Homestead?

There’s a very famous—or infamous—case in Florida from 2001 where a bankruptcy Judge ruled that a homestead placed into a Revocable Living Trust lost it’s homestead status. None of the more recent homestead cases follow this ruling. More conservative attorneys will not advise clients to place their homestead into their Revocable Living Trusts. We typically advise clients to place their homestead into their Trusts and I have placed my own personal residence in my own Trust. However, always seek competent legal counsel before placing your homestead into a Revocable Living Trust.

Caution: If you have an active judgment against you or you may be facing a lawsuit in the future, it may be best to just leave the homestead out of the Trust. Please speak with a competent attorney before taking any action.

Will My Florida Homestead Be Sold if I Owe Money After I Die?

It’s very common for individuals to owe money after they die. Bills can pile up due to unforeseen hospital expenses, credit cards, and other miscellaneous debts. If your homestead goes through the probate court system here in Florida and you require that your homestead be sold, then Florida law allows creditors to pierce the homestead protection. However, if you pass away and you do not require the sale of your homestead, as long as the homestead passes to a surviving spouse or your heirs, then the homestead will be protected.

Example: Cathy dies in Florida and owes over $200,000 in outstanding hospital bills. Her only significant asset is her Florida homestead worth $350,000. Her beneficiaries are her three children and she did not force the sale of the homestead in her Will.

Result: Since Cathy’s homestead passed to her heirs—her three children—the hospital will be unable to collect on their $200,000 in outstanding hospital bills. The homestead will pass free and clear to Cathy’s three children.

Is There a Dollar Cap on the Amount a Florida Homestead Will Be Protected From Creditors?

No, there is no dollar cap on the homestead exemption from creditors here in Florida. You could own a $100 million dollar home and it will be completely protected as long as it meets all of the homestead requirements in Florida.

How Much Land Can My Florida Homestead Be Located on and Still Be Protected From Creditors?

If your homestead is located within a municipality—a city or town that has its own incorporated government for local affairs—then the homestead can only be located on one half of an acre to be completely protected from creditors. However, if the homestead is located outside of a Florida municipality, then the homestead can be protected up to 160 acres of contiguous land.

Will Executing a Lady Bird Deed or a Revocable Trust Affect My Florida Homestead Tax Benefits?

No. As long as the Florida Lady Bird Deed and Revocable Living Trust are properly drafted and contain the correct language, your Florida Homestead tax benefits will not be affected.

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