Buying a property at a foreclosure sale can be an exciting opportunity to secure real estate at a lower price. However, many buyers are unaware of potential property tax pitfalls associated with such purchases. Attorney Jonathon Daily of Daily Law, PLLC, recently assisted a client facing property tax challenges after buying a foreclosed property. Here’s what you need to know to avoid common issues and protect your investment.

The Property Tax Issue: A Client’s Story

Our client purchased a property through a foreclosure auction and was thrilled with the deal they had secured. However, a few months later, they received a property tax bill that was far higher than they anticipated. Why? Because the assessed value of the property had been reset, reflecting the market value rather than the previous owner’s capped assessment under Florida’s Save Our Homes (SOH) benefit. This sudden spike in taxes put an unexpected financial strain on the client.

Understanding the Homestead Exemption

In Florida, property owners can file for a homestead exemption if the property is their primary residence. This exemption provides significant tax benefits, including a reduction in the taxable value of the property and a cap on how much the assessed value can increase each year. Property taxes can increase dramatically without this exemption, especially if the assessed value is reset after a change in ownership.

Avoiding a Reset of the Assessed Value

To avoid the reset of the assessed value and benefit from property tax savings, it is crucial to:

1. File for a Homestead Exemption Promptly: Florida law requires homeowners to file for a homestead exemption by March 1 of the year following their purchase. Missing this deadline can result in losing out on substantial savings.
2. Check for Portability: If you previously owned a homesteaded property in Florida, you might be eligible to transfer (or “port”) your accumulated SOH benefit to your new property. This can further reduce your property tax liability.
3. Consult a Real Estate Attorney: A knowledgeable attorney can guide you through the process, ensuring you understand all tax implications and deadlines.
   
   

Key Takeaways

• Purchasing a property at a foreclosure sale can lead to unexpected property tax increases if you don’t take the proper steps.
• Filing a homestead exemption on time is critical to securing tax benefits and avoiding resetting the assessed value.
• The portability of the SOH benefit can provide additional tax savings.
  
  

Navigating property tax laws can be complex, especially for buyers unfamiliar with Florida’s homestead exemption rules. At Daily Law, PLLC, we specialize in real estate law and are here to help you protect your investment. If you’ve recently purchased a property or are considering buying one, contact us today for a consultation. Contact us today at 772-236-4046 or info@daily-law.com to schedule a consultation.