Florida Homestead Exemption

Florida Homestead ExemptionThe State of Florida provides a homestead exemption which is designed to protect persons from the attachment or seizure of their places of residence by creditors. The homestead exemption provides protection against such creditor action to debtors who file bankruptcy and debtors who do not file bankruptcy. The homestead exemption for purposes of asset protection is often confused with the homestead exemption that provides a reduction in property tax obligations. This article will discuss the homestead exemption as it applies to debtors seeking to protect their home or homestead from attachment and seizure by creditors who are outside the mechanism of bankruptcy and debtors who are utilizing the homestead exemption within a bankruptcy filing.


The Florida homestead exemption is provided in Article X, Section 4 of the Florida Constitution, as amended in 1968:

SECTION 4. Homestead; exemptions-

(a)There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person:

(1) a homestead, if located outside a municipality, to the extent of one hundred sixty acres of contiguous land and improvements thereon, which shall not be reduced without the owner’s consent by reason of subsequent inclusion in a municipality; or if located within a municipality, to the extent of one-half acre of contiguous land, upon which the exemption shall be limited to the residence of the owner or the owner’s family.


The Florida homestead exemption contains no limitation as to the value of the residence. However, for a debtor who claims the Florida homestead exemption in a bankruptcy, there are limitations. If the debtor owned the residence for less than 1215 days before the filing of the bankruptcy, the homestead exemption is limited to $125,000 equity in the residence. Bankruptcy Code Section 522(p) addresses this limitation. The debtor should be able to double the $125,000 equity limit if the debtor is filing bankruptcy with a spouse who also has an ownership interest in the property. After 1215 days, there is no limitation as to the value of the property.


Various criteria must be present for a debtor to claim the homestead exemption. First, the homestead exemption applies only to natural persons. The Florida homestead exemption was initially limited only to the head of household. The Florida Constitution was amended in 1984 to extend the homestead exemption to property “owned by a natural person.” The definition of what constitute a “natural person” for purposes of the Florida homestead exemption is itself, the subject of considerable debate and litigation.

If a husband and wife purchase a dwelling, do the husband and wife qualify as a “natural person?” The husband and wife can qualify as a natural person for the purpose of the homestead exemption. Each party can claim individually the protections offered by the homestead exemption. For example, a homestead located within a municipality is limited to a ½ acre of property. In a bankruptcy filed by debtors who are married, the debtors may each claim a homestead exemption in the bankruptcy, and therefore protect up to one acre of property.

Another issue occurs when the spouses claim to be separated and maintaining separate homesteads. In such instance, may each individual spouse claim a separate homestead? Such an instance has a high potential for abuse. A married couple owning two properties may attest they are separated in order to claim the homestead exemption for each of the properties. However, the courts have generally held that in the absence of fraud, both the husband and wife may claim separate homesteads. However, upon objection by a creditor, or a bankruptcy trustee in bankruptcy, the husband and wife may be required to offer proof that they are in fact separated, maintaining separate dwellings, and have the intent that such dwelling operate as their homesteads.

Although a creditor may argue that a homestead jointly owned by a husband and wife is presumed to be owned in tenancy by the entireties, and therefore is not owned by a “natural person”, it is unlikely it was the intent of the State Legislature in amending the Florida Constitution to prevent a husband and wife who own their home as tenants by the entireties to be prevented from claiming their homestead as exempt. Furthermore, the Florida Supreme Court held in Coleman v Williams that property held in tenancy by the entireties can qualify a homestead property.

The concept of tenancy by the entireties is apart from the homestead exemption. However, tenancy by the entireties, a common law concept that is adopted in the State of Florida, can also used by a debtor seeking protection from creditors outside of bankruptcy, or against a bankruptcy trustee or creditor within a bankruptcy.

The debtor must only have a beneficial interest in the property to claim the homestead exemption. Milton v Milton held that the debtor must only own an undivided interest in the property. The ownership interest in the property does not have to include legal title. An equitable or beneficial interest is enough to satisfy the requirements of the homestead exemption.

The homestead exemption required that a present, possessory interest is required. A future interest or remainder interest does not satisfy the ownership requirement, even in situations in which the claimant occupies the property.


The Florida homestead exemption limits the property possessed by the homestead to one half acre if the property is located in a municipality and 160 acres for property located outside of a municipality. It appears that each party claiming the homestead exemption in a bankruptcy, for example, should be permitted to claim individually, the full measure of the homestead exemption. For example, married persons filing bankruptcy jointly should be permitted to each claim 160 acres of property if such property is located outside of a municipality, for a total allowance of 320 acres.

A municipality is defined as “a legally incorporated or duly authorized association of the inhabitants of a particularly designated place or limited territorial area, established for prescribed local governmental and public utility or other public purposes.”

If the debtor owns the homestead prior and the subject property is outside of a municipality but is subsequently incorporated into a municipality, the property retains its exempt status unless the owner consents. The bankruptcy court in the Middle District of Florida entered a decision in In re Boucher held that the form of consent required by the constitutional provision required either an affirmative step evidencing an intent to reduce one’s acreage or conduct that may be construed as abandonment of the property as homestead.

When the property acreage is in excess of the allowable acreage under the constitutional homestead exemption, the property owner may generally may a reasonable designation of the portion that is exempt. However, the designation may not destroy the marketability of the non-exempt portion. If the non-exempt portion of the property cannot be sold, the entire property will be sold and the proceeds divided or apportioned according to the exempt and non-exempt proceeds.


The Florida Constitution originally limited the homestead exemption did not extend to “more improvements or buildings than the residence and business house of the owner.” The State of Florida amended the State Constitution in 1968 to provide that the homestead provision “shall be limited to the residence.”

This change to the homestead exemption resulted in a plethora of litigated matters as to what constitutes “the residence.” For example, are sheds, pools and other structures considered to be within the residence?


A property can qualify under the Florida homestead exemption if it contains more than one deeded property, provided such properties are contiguous. A contiguous lot that is unimproved and not used for a business purpose will generally qualify under the homestead exemption.

The 1968 amendment to the Florida Constitution expressly provides that the property claimed as exempt be contiguous. The plain meaning of contiguous is that the individual parcels must be touching.

The presence of an easement does not prevent the contiguous nature of the property according to the Northern District of Florida bankruptcy court decision in In re Jackson. In Jackson, the court differentiated between roadways resulting from fee title and roadways granted by an easement.


If the debtor conducts business on a portion of the homestead property, does this affect the homestead exemption? A number of cases of held that the use of a portion of the property for business purposes does not prevent the homestead exemption. These cases include Edward Leasing Corp v Uhlig, In re Haning and In re Nelson. However, In re Bell came to an opposing conclusion.

An additional issue arises if the debtor rents or leases a portion of the homestead property. Early cases held that such rental or lease of a portion of the homestead property does not impact the homestead exemption based upon a theory or position that the property could not be divided. The 11th Circuit in In re Englander resolved this issue through its argument that such property could be divided and the proceeds divided according to the property’s homestead and non homestead qualities.

A bankruptcy decision in the Southern District of Florida, In re Nofsinger held that the homestead exemption is limited to the portion of the property that is used as a residence. The portion of the property that is used for business activities, including the portion of the property that is either rented or leased, is not subject to the protection of the Florida homestead exemption. An earlier holding in the Northern District of Florida, In re Israel, found that a portion of the rural homestead remains exempt even if such portion is rented or leased.

The problem with the Nofsinger opinion is that it disregards the reason for which municipal homesteads and rural homesteads are treated differently. The rural homestead was provided a larger size limitation and not limited in its use in order to permit farmers to claim their farms as exempt and protected under the homestead protection. Under the Nofsinger analysis, the portion of rural property that is used by the debtor for a business purpose, including farming, would not be exempt under the homestead exemption.

For farmers, and family fishermen, there is a dedicated Chapter of the bankruptcy code called Chapter 12, which is specifically dedicated to those who are engaged in such endeavors.


To claim the homestead exemption, the debtor must actually occupy the residence. Mere intent to occupy the residence is not sufficient to claim the homestead exemption. A home under construction and unoccupied does not provide a sufficient claim for the homestead exemption.

In addition to actual occupancy, the debtor must possess the intent of permanently residing in the property. A homeowner who did not possess a permanent visa was deemed not to have the requisite intent of permanently residing in the property. It is not required that the debtor intends to remain in the property permanently but that the debtor intends to remain in the property indefinitely.

Such occupancy does not necessarily have to continuous. If the debtor abandons the property, the debtor loses his claim to the homestead exemption. For abandonment to occur, the debtor or both the debtor and his family if the property is situated within the municipality, must surrender possession with the intention of discontinuing its use as a homestead.

In cases in which the debtor or his or her family leaves the property with an intention to return, there may be a sufficient basis to claim the homestead exemption. The courts will make such determination based upon the facts of each individual case including the reason for the absence, how the property was used during the absence, the length of time the claimant was absent, and other factors indicating intent to return to the property.

One court granted the homestead exemption where the debtor’s house was destroyed by a hurricane and the debtor made efforts to sell the house, the proceeds of which the debtor intended to use to purchase a new homestead. Another court granted the homestead exemption where the debtor left Florida after his business terminated, rented his condominium, and later returned to Florida, and resided at a different location.

When the debtor intends to sell his homestead, any effort to effectuate the sale including the hiring of a realtor or a contract to sell, will not invalidate the homestead exemption, provided the debtor remains in possession of the residence. If the debtor leaves the residence before the sale the homestead exemption will remain provided the debtor intends to use the proceeds towards the purchase of another homestead in Florida.

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