For homestead exemptions, no mercy for slipups

Article Courtesy of The Herald-Tribune

By Tom Lyons

Published March 25, 2016


Because Irwin Srob applied for and got a homestead exemption on his Sarasota condo, he saved a lot of money over the next 13 years, especially during times when appraised property values were skyrocketing.

But now, that property tax break is costing him far more than he saved. Twice as much.


The retiree just got slammed with a $26,000 bill for unpaid taxes plus fines and interest, based on a claim that he got the exemption improperly.

And he is far from alone.

The exemption severely limited tax appraisal increases that, especially in the real estate boom of the early and mid-2000s, were making taxes spike sharply for non-homestead properties.

And you may recall that because of that spike, some property owners signed up for Florida's homestead exemptions in iffy or unlawful circumstances, often claiming it for houses or condos they only visited seasonally while still living in another state.

A few got caught back then.

Some, who only came here on vacation, took elaborate steps to look, on paper, like new Florida residents. But others didn't even bother to change their voter registration or do much else to support a bogus residency claim.

Some even dared to double dip, continuing to claim something like a homestead exemption in the other state, too, though such primary residence tax breaks known by various names rarely save anywhere near as much money as Florida's exemption.

Recently, 396 property owners in Sarasota County alone have been pegged as offenders, thanks largely to work by a vendor hired to find double dippers and other possible property tax dodgers. More than 445 others are listed as potential cases.

Tax Management Associates, Inc., a North Carolina company, does the work of finding improper homestead claimants. The company works for a cut of what the property appraiser recoups.

Often that is a lot. Srob's bill for $26,436 is nothing unusual, and some are much larger, thanks to the required 15 percent interest and a 50 percent penalties that are tacked on each time the property appraiser confirms that an exemption was improperly acquired.

But are some people getting hammered way too hard for violations that were accidental and maybe questionable and marginal?

Even property appraiser Bill Furst says he has wondered the same thing.

Take Srob's case. He really moved here, he says, and the documents back that up. Though he and his partner still own a barn-like house on Long island where they used to live, Florida has long been their lawful primary residence.

But for several of their Florida years, they did still save a few hundred dollars annually in New York taxes. Despite their official change of address notification, that similar but much smaller New York exemption was never revoked.

The resulting double dipping was accidental, Srob says. And it is New York that was then granting the improper (and much smaller) exemption, not Florida, he says.

But Srob, a retired ad agency employee, says he won't even argue about that. Accident or not, he knows Florida law offers him no choice but to pay back what he saved in Florida taxes during those double-dip years. It hurts, but so be it, he says.

Here is what has him upset: The New York exemption was withdrawn five years ago. For the last five years he has not been double dipping. No one questions his residency here in Sarasota during that time. But yet, he is still being nailed for those years, too, including the usual interest and whopping penalty.

“That doesn't seem right,” Srob said.

Seems like he has a point. But the logical yet brutal argument to the contrary goes like this:

Yes, Srob was legally entitled to a homestead exemption for the past five years, but he didn't apply for one and didn't have one. Period.

True, he thought he had one, and that is why he didn't apply. But all he had was a void and fraudulently obtained exemption granted when he wasn't entitled to it, because he still had that similar but much smaller exemption in New York then. So, too bad.

Got it?

Furst says he has asked Florida's Department of Revenue about the possibility of cutting some slack in some cases, including one in which the tax and penalty bill was higher than the home's current value.

The state's answer is always firm and clear: State law allows property appraisers no wiggle room or negotiating power, he says. Even in cases where the penalty seems out of proportion to an unintentional technical slipup, the full amount has to be billed.

“We have to do it,” Furst said. Mercy is not allowed.

It isn't much help to , Srob but at least Furst sounded just a little apologetic.