Florida Supreme Court Extends Homestead Exemption to Non-Residents

October 2012Articles In the Zone

A unanimous Florida Supreme Court has rebuffed an appeal by the Property Appraiser of the state's largest county to deny an ad valorem property tax exemption to foreign property owners. On October 4, 2012, in Garcia v. Andonie, the Supreme Court upheld the Third District Court of Appeal's affirmation of a 2006 circuit court decision granting homestead benefits to David and Ana Andonie, an Hondoran couple residing in a $1 million Key Biscayne under a temporary visa. In reaching its decision, the court rejected the Miami-Dade Property Appraiser's argument that since the Andonies are not permanent residents of the State of Florida, they fail to fulfill the entitlement standards for the exemption under Florida law.

The Andonies' initial homestead application for the 2006 tax year included a sworn statement that their condominium was being maintained as the permanent residence of their three minor children (each of whom was born in Florida and is a citizen of the United States). The Property Appraiser rejected the application in reliance of section 196.031(1), Florida Statutes (2006), which reads in relevant part:

Every person who, on January 1, has the legal title or beneficial title in equity to real property in this state and who resides thereon and in good faith makes the same his or her permanent residence, or the permanent residence of another or others legally or naturally dependent upon such person, is entitled to an exemption from all taxation… as defined in s. 6, Art. VII of the State Constitution.

Article VII, Section 6(a) of the Florida Constitution, states in pertinent part:

Every person who has the legal or equitable title to real estate and maintains thereon the permanent residence of the owner, or another legally or naturally dependent upon the owner, shall be exempt from taxation thereon . . . upon establishment of right thereto in the manner prescribed by law.

The court premised its decision upon Article VII, Section 6(a), going so far as to opine that the inconsistent "and who resides thereon" element of its statutory counterpart (language which was also included in the Constitution until it was amended in 1968) "is invalid and unenforceable as a legal element of entitlement for the ad valorem tax exemption as provided for under the plain language of article VII, section 6."

Florida has a rich history of residential property ownership by citizens of other states, and more recently, other nations. While it’s certainly too early to conclusively evaluate the ramifications of the Andonie decision, the case may have a significant impact upon non-resident homeowners in our state.