Transfer of Homestead Assessment Difference; “Portability”; Sworn Statement Required; Denials; Late Applications

 

DEPARTMENT OF REVENUE

Property Tax Oversight Program

RULE NO.:RULE TITLE:

12DER14-3Transfer of Homestead Assessment Difference; “Portability”; Sworn Statement Required; Denials; Late Applications

SPECIFIC REASONS FOR FINDING AN IMMEDIATE DANGER TO THE PUBLIC HEALTH, SAFETY OR WELFARE: Section 13 of Chapter 2008-173, Laws of Florida, (the “act”), expressly authorizes the Executive Director of the Department of Revenue to adopt emergency rules to implement the act. Emergency Rule 12DER14-3 is being adopted to implement the provisions of the act concerning the transfer of the homestead assessment difference. Section 13 of the act expressly provides that all conditions are deemed met to adopt emergency rules under Sections 120.536(1) and 120.54(4), Florida Statutes, for the purpose of implementing the act. The act further provides that such rules remain in effect for 18 months and can be renewed during the pendency of procedures to adopt rules addressing the subject of the emergency rules.

REASON FOR CONCLUDING THAT THE PROCEDURE IS FAIR UNDER THE CIRCUMSTANCES: The Legislature expressly authorized the Department of Revenue to adopt emergency rules that implement the provisions of Chapter 2008-173, Laws of Florida. The law provides that these emergency rules remain in effect for a period of 18 months and that they may be renewed during the pendency of procedures to adopt rules addressing the subject of the emergency rules. This emergency rule (Emergency Rule 12DER14-3) renews and replaces Emergency Rule 12DER12-8 (adopted on December 7, 2012), which combined, renewed, and replaced Emergency Rules 12DER11-3 and 12DER11-6 (which were adopted on May 27, 2011). The Department of Revenue originally took several actions to inform interested parties about the forms, procedures, and emergency rules that were adopted on May 27, 2011 to implement this new law, and to give these parties an opportunity to review and comment. These interested parties included Property Appraisers and the professional associations that represent them, taxing authorities, including counties, municipalities, and independent districts, school districts, their associations, and practitioners who have told the Department that they want to receive all information associated with property tax rulemaking. The actions that the Department took when Emergency Rules 12DER11-3 and 12DER11-6 were being prepared for adoption include: making the proposed drafts available via the Internet for public review and comments; and, establishing a new Department email address to make it easier for interested parties to submit comments and questions to the agency. During the period that these emergency rules were in effect, the Department has held rule development workshops and public hearings on a permanent version of this emergency rule. The emergency rule being proposed for adoption is identical to the current draft of the permanent rule, and incorporates changes based on comments from the public during promulgation of the permanent rule.

SUMMARY: The purpose of this emergency rule is to provide procedures for applicant taxpayers and property appraisers regarding denials and late applications of portability. This rule also provides the limitations and special rules to be implemented and the forms to be used by applicant taxpayers and property appraisers for the transfer of assessment limitation difference, when a homestead is abandoned.

THE PERSON TO BE CONTACTED REGARDING THE EMERGENCY RULE IS: Mike Cotton, Department of Revenue, Property Tax Technical Unit, 2450 Shumard Oak Blvd., Tallahassee, Florida 32399-0100, telephone: [phone], Fax: [phone], email address: [e-mail]

 

THE FULL TEXT OF THE EMERGENCY RULE IS:

 

(Note: This emergency rule renews and replaces Emergency Rule 12DER12-08 (adopted December 7, 2012).  Emergency Rule 12DER12-08 renewed and replaced 12DER12-07 (adopted November 26, 2012).  Emergency rule 12DER12-07 combined, renewed and replaced Emergency Rules 12DER11-03 and 12DER11-06 (adopted May 27, 2011). This rule will remain in effect during the pendency of procedures to adopt permanent rules addressing the subject matter of this emergency rule.)

 

12DER14-3 Transfer of Homestead Assessment Difference; “Portability”; Sworn Statement Required; Denials; Late Applications.

(1) For purposes of this rule, the following definitions apply.

(a) The “previous property appraiser” means the property appraiser in the county where the taxpayer’s previous homestead property was located.

(b) The “new property appraiser” means the property appraiser in the county where the taxpayer’s new homestead is located.

(c) The “previous homestead” means the homestead which the assessment difference is being transferred from.

(d) The “new homestead” means the homestead which the assessment difference is being transferred to.

(e) “Assessment difference” means the difference between assessed value and just value attributable to Section 193.155, F.S.

(2) Section 193.155(8), F.S., provides the procedures for the transfer of the homestead assessment difference, within stated limits, when a homestead is abandoned. This rule describes those procedures, which are an alternative to assessment at just value. The amount of the assessment difference is transferred as a reduction to the just value of the interest owned by taxpayers that qualify and receive homestead exemption on a new homestead.

(a) This rule sets limits and requirements consistent with Section 193.155(8), F.S. A taxpayer may apply for the transfer of an assessment difference from a previous homestead property to a new homestead property if:

1. The taxpayer received a homestead exemption on the previous property on January 1 of one of the last two years before establishing the new homestead; and,

2. The previous property was abandoned as a homestead after that January 1; and,

3. The previous property was, or will be, reassessed at just value or assessed under Section 193.155(8), F.S., as of January 1 of the year after the year in which the abandonment occurred subject to Subsections 193.155(8) and 193.155(3), F.S; and

4. The taxpayer establishes a new homestead on the property by January 1 of the year they are applying for the transfer.

(b) Under Section 193.155(8), F.S., the transfer is only available from a prior homestead for which a taxpayer previously received a homestead exemption. For these rules:

1. If a husband and wife owned and resided on a previous homestead, each is considered to have received the homestead exemption, even if only one of them applied.

2. For joint tenants with rights of survivorship and for tenants in common, those who applied for, received the exemption, and resided on a previous homestead are considered to have received the exemption.

(3)(a) To apply for portability, the taxpayer must file Form DR-501T, Transfer of Homestead Assessment Difference, (incorporated by reference in Rule 12D-16.002, F.A.C.), including a sworn statement, by March 1. Form DR-501T is submitted as an attachment to Form DR-501, Original Application for Ad Valorem Tax Exemption, (incorporated by reference in Rule 12D-16.002, F.A.C.).

(b) If the taxpayer meets the qualifications and wants to designate the ownership share of the assessment difference to be attributed to him or her as husband and wife for transfer to the new homestead, the taxpayer must also file a copy of Form DR-501TS, Designation of Ownership Shares of Abandoned Homestead (incorporated by reference in Rule 12D-16.002, F.A.C.) that was already filed with the previous property appraiser as described in subsection (5).

(4) Within the limitations for multiple owners in subsection (5), the total which may be transferred is limited as follows:

(a) Upsizing – When the just value of the new homestead equals or is greater than the just value of the previous homestead, the maximum amount that can be transferred is $500,000.

(b) Downsizing – When the just value of the new homestead is less than the just value of the previous homestead, the maximum amount that can be transferred is $500,000. Within that limit, the amount must be the same proportion of the new homestead’s just value as the proportion of the assessment difference was of the previous homestead’s just value.

(5)(a) Transferring without splitting or joining – When two or more persons jointly abandon a single homestead and jointly establish a new homestead, the provisions for splitting and joining below do not apply if no additional taxpayers are part of either homestead. The maximum amount that can be transferred is $500,000.

(b) Splitting – When two or more people who previously shared a homestead abandon that homestead and establish separate homesteads, the maximum total amount that can be transferred is $500,000. Within that limit, each taxpayer who received a homestead exemption and is eligible to transfer an amount is limited to a share of the previous homestead’s difference between assessed value and just value. The shares of the taxpayers that received the homestead exemption cannot total more than 100 percent.

1. For tenants in common, this share is the difference between just value and assessed value for the tenant’s proportionate interest in the property. This is the just value of the taxpayer’s interest minus the assessed value of the taxpayer’s interest.

2. For joint tenancy with right of survivorship and for a husband and wife, the share is the assessed value of the homestead portion of the property, divided by the number of owners that received the exemption, unless another interest share is on the title. In that case, the portion of the amount that may be transferred is the difference between just value and assessed value for the stated share.

3. Subparagraphs 1. and 2. do not apply if a husband and wife abandon jointly titled property and designate their respective ownership shares by completing and filing Form DR-501TS. When a complete and valid Form DR-501TS is filed as provided in this subparagraph, the designated ownership shares are irrevocable.

If a husband and wife abandon jointly titled property and want to designate their respective ownership shares they must:

a. Be married to each other on the date the jointly titled property is abandoned.

b. Each execute the sworn statement designating the person’s ownership share on Form DR-501TS.

c. File a complete and valid Form DR-501TS with the previous property appraiser before either person applies for portability on Form DR-501T with the new property appraiser.

d. Include a copy of Form DR-501TS with the homestead exemption application filed with the new property appraiser as described in subsection (3).

4. Except when a complete and valid designation form DR-501TS is filed, the shares of the assessment difference cannot be sold, transferred, or pledged to any taxpayer. For example, if a husband and wife divorce and both abandon the homestead, they each take their share of the assessment difference with them. The property appraiser cannot accept a stipulation otherwise.

(c) If two or more persons who have each received a homestead exemption as of January 1 of either of the 2 immediately preceding years and who would otherwise be eligible to have a new homestead property assessed under this subsection establish a single new homestead, the reduction from just value is limited to the higher of the difference between the just value and the assessed value of either of the prior eligible homesteads as of January 1 of the year in which either of the eligible prior homesteads was abandoned, but may not exceed $500,000.

(6) Abandonment.

(a) To transfer an assessment difference, a homestead owner must abandon the homestead before January 1 of the year the new application is made.

(b) In the case of joint tenants with right of survivorship, if only one owner moved and the other stayed in the original homestead, the homestead would not be abandoned. The one who moved could not transfer any assessment difference.

(c) To receive an assessment reduction under Section 193.155(8), F.S., a taxpayer may abandon his or her homestead even though it remains his or her primary residence by providing written notification to the property appraiser of the county where the homestead is located. This notification must be delivered before or at the same time as the timely filing of a new application for homestead exemption on the property. This abandonment will result in reassessment at just value as provided in subparagraph (2)(a)3. of this rule.

(7) Only the difference between assessed value and just value attributable to Section 193.155, F.S., can be transferred.

(a) If a property has both the homestead exemption and an agricultural classification, a taxpayer cannot transfer the difference that results from an agricultural classification.

(b) If a homeowner has a homestead and is receiving a reduction in assessment for living quarters for parents or grandparents under Section 193.703, F.S., the reduction is not included in the transfer. When calculating the amount to be transferred, the amount of that reduction must be added back into the assessed value before calculating the difference.

(8) Procedures for property appraiser:

(a) If the previous homestead was in a different county than the new homestead, the new property appraiser must transmit a copy of the completed Form DR-501T with a completed Form DR-501 to the previous property appraiser. If the previous homesteads of taxpayers applying for transfer were in more than one county, each taxpayer from a different county must fill out a separate Form DR-501T.

1. The previous property appraiser must complete Form DR-501RVSH, Certificate for Transfer of Homestead Assessment Difference (incorporated by reference in Rule 12D-16.002, F.A.C.). By April 1 or within two weeks after receiving Form DR-501T, whichever is later, the previous property appraiser must send this form to the new property appraiser. As part of the information returned on Form DR-501RVSH, the previous property appraiser must certify that the amount transferred is part of a previous homestead that has been or will be reassessed at just value as of January 1 of the year after the year in which the abandonment occurred as described in subparagraph (2)(a)3. of this rule.

2. Based on the information provided on Form DR-501RVSH from the previous property appraiser, the new property appraiser calculates the amount that may be transferred and applies this amount to the January 1 assessment of the new homestead for the year applied for.

(b) If the transfer is from the same county as the new homestead, the property appraiser retains Form DR-501T. Form DR-501RVSH is not required. For a taxpayer that applied on time for the transfer of assessment difference, the property appraiser updates the ownership share information using the share methodology in this rule.

(c) The new property appraiser must record the following in the assessment roll submitted to the Department according to Section 193.1142, F.S., for the year the transfer is made to the homestead parcel:

1. Flag for current year assessment difference transfer;

2. Number of owners among whom the previous assessment difference was split. Enter 1 if previous difference was not split;

3. Assessment difference value transferred;

4. County number of previous homestead;

5. Parcel ID of previous homestead;

6. Year from which assessment difference value was transferred;

(d) Property appraisers that have information sharing agreements with the Department are authorized to share confidential tax information with each other under Section 195.084, F.S., including social security numbers and linked information on Forms DR-501, DR-501T, and DR-501RVSH.

(9) The transfer of an assessment difference is not final until all values on the assessment roll on which the transfer is based are final. If the values are final after the procedures in these rules are exercised, the property appraiser(s) must make appropriate corrections and send a corrected assessment notice. Any values that are in administrative or judicial review must be noticed to the tribunal or court for accelerated hearing and resolution so that the intent of Section 193.155(8), F.S. may be fulfilled. This rule does not authorize the consideration or adjustment of the just, assessed, or taxable value of the previous homestead property.

(10) Additional provisions.

(a) If the information from the previous property appraiser is provided after the procedures in this section are exercised, the new property appraiser must make appropriate corrections and send a corrected assessment notice.

(b) The new property appraiser must promptly notify a taxpayer if the information received or available is insufficient to identify the previous homestead and the transferable amount. This notice must be sent by July 1.

(c) If the previous property appraiser supplies enough information to the new property appraiser, the information is considered timely if provided in time to include it on the notice of proposed property taxes sent under Sections 194.011 and 200.065(1), F.S.

(d) If the new property appraiser has not received enough information to identify the previous homestead and the transferable amount in time to include it on the notice of proposed property taxes, the taxpayer may file a petition with the value adjustment board in the county of the new homestead.

(11) Denials.

(a) If the taxpayer is not qualified for transfer of any assessment difference, the new property appraiser must send Form DR-490PORT, Notice of Denial of Transfer of Homestead Assessment Difference, (incorporated by reference in Rule 12D-16.002, F.A.C.) to the taxpayer by July 1 and include the reasons for the denial.

(b) Any property appraiser who sent a notice of denial by July 1 because he or she did not receive sufficient information to identify the previous homestead and the amount which is transferable, may grant the transfer after receiving information from the previous property appraiser showing the taxpayer was qualified. If a petition was filed based on a timely application for the transfer of an assessment difference, the value adjustment board must refund the taxpayer the $15.

(c) Petitions of denials may be filed with the value adjustment board as provided in Rule 12D-9.028, F.A.C.

(12) Late applications.

(a) Any taxpayer qualified to have property assessed under Section 193.155(8), F.S., who fails to file for a new homestead on time in the first year following eligibility may file in a subsequent year. The assessment reduction must be applied to assessed value in the year the transfer is first approved. A refund may not be given for previous years.

(b) Any taxpayer who is qualified to have his or her property assessed under Section 193.155(8), F.S., who fails to file an application by March 1, may file an application for assessment under that subsection and, under Section 194.011(3), F.S., may file a petition with the value adjustment board requesting the assessment be granted. The petition may be filed at any time during the taxable year by the 25th day following the mailing of the notice by the property appraiser as provided in Section 194.011(1), F.S. In spite of Section 194.013, F.S., the taxpayer must pay a nonrefundable fee of $15 when filing the petition, as required by paragraph (j) of Section 193.155(8), F.S. After reviewing the petition, the property appraiser or the value adjustment board may grant the assessment under Section 193.155(8), F.S., if the property appraiser or value adjustment board find the taxpayer is qualified and demonstrates particular extenuating circumstances to warrant granting the assessment.

Rulemaking Authority 195.027(1), 213.06(1) FS. Law Implemented 192.047, 193.114, 193.1142, 193.155, 193.461, 193.703, 194.011 FS. History–New 6-6-14.

 

THIS RULE TAKES EFFECT UPON BEING FILED WITH THE DEPARTMENT OF STATE UNLESS A LATER TIME AND DATE IS SPECIFIED IN THE RULE.

EFFECTIVE DATE: June 6, 2014