One of the benefits of living in our beautiful Sunshine State is the protection afforded homeowners via the The Florida Constitution, Article X, Section 4, otherwise known as the Homestead Exemption.  The Homestead Exemption provides protection from creditors in almost all situations; however, the provision has limitations.  The provision excludes certain types of debts: mortgages, property taxes and repairs to improve the land.  Further, protection is not provided for property greater than “one-half acre of contiguous land” within a municipality and “one hundred sixty acres of contiguous land and improvements thereon” outside a municipality.  If property is larger than one-half acre within a municipality, only the half acre portion is protected.  Further, funds from the sale of homestead property are subject to the same limitation based on the percentage of the protected land compared to the entire property.  Due to the limitations mentioned above, taxes and mortgage debts are paid before the net proceeds are divided pro rata based on the amount of land entitled to the Homestead protection.

Although a bit counterintuitive, even vacant land or uninhabitable property is entitled to protection under the Homestead Exemption.  The circumstances are largely determined by the homeowner’s actions and intentions in maintaining a homestead or whether the property is deemed abandoned.  Actions evidencing an intention to maintain the homestead are not limited to physical presence or absence on the property.  Subjective analysis of the homeowner’s intent is key.  Consideration of whether the property has been placed for sale and the homeowner’s actions in maintaining a Florida residence is required.  Tax returns, driver’s license records and financial records regarding the purchase or lease of property in other states are analyzed in determining whether vacant land is entitled to protection.

Florida residents, new and old, should keep these limitations in mind when utilizing the Homestead Exemption as a vehicle to protect assets or when wearing the hat of a creditor pursuing real property.