Florida provides several attractive homeowner tax exemptions that can add substantial tax savings when you document your annual income tax return appropriately. Most of these deductions are designed to reduce the financial burden of property taxes. Florida homestead tax exemptions include:
The mortgage interest tax deduction is what you receive by deducting your monthly mortgage interest from your total taxable income. This type of tax exemption comes with limits and is available for the interest you pay on your primary or second home on an overall mortgage value of:
Moreover, this tax exemption is limited to specific types of mortgages. You may qualify if only your loan is used to buy, build or improve your current home, finance a home equity loan, refinance a loan, or finance a first or second mortgage.
The MIP property tax deduction is a federal exemption that allows you to reduce mortgage insurance payments you made during the tax year. For example, if you made mortgage payments during 2020, you can amend your 2020 taxes to request the exemption for this year.
However, like the mortgage interest property, MIP has income limits by which you can claim exemptions. If you earn $50,000+ as an individual or $100,000+ as a couple, the amount of PMI you can deduct is restricted. Those who earn $54,000+ as individuals or $109,000+ as a couple do not qualify for this exemption.
Florida offers various tax deductions for veterans and their families. They may include deployment exemptions, mortgage interest deduction, surviving spouse exemption, and disabled veteran exemption.
Florida residents above 65 years and who have lived in the state for more than 25 years may receive up to 100% property tax deduction. The limits to these exemptions state that your property’s value must not exceed $250,000, you must come from specific regions of the state, and your income must fall within specified limits.
When you buy a home in Florida, your property taxes may be slightly higher than your neighbors. However, you can claim the Florida homestead exemption through the Save Our Homes Benefit, preventing the property’s appraised value from rising by more than 3% per year.
If you have physical limitations and need a wheelchair for mobility, you might be eligible for tax relief from Florida property taxes.
Homeowners can sometimes face hefty property tax bills. Fortunately, Florida offers several tax exemptions that are designed to help homeowners defray costs. If you are purchasing a home or are a new homeowner, you may have questions about property tax and how your property tax bill will be paid. At Atlantic Coast Title and Escrow, we walk our clients through every step of the closing process so that they know exactly what to expect as homeowners.