A question we regularly receive is “How do I become a Florida Resident”.
Firstly, Florida does not have specific rules for residency. Each case is fact specific. So let’s start with some of the benefits retirees and other citizens seek to establish themselves as Florida Residents and then give you some ways to establish yourself as a Florida Resident.
Benefits of Florida Residency
Homestead Tax Exemption
Florida Residents receive preferential treatment in the valuation of their homestead property in the form of an exemption. This exemption can translate into hundreds of dollars in savings off your tax bill.
Florida Residents also receive a “Save our Homes Cap” this “cap” is a limitation on the amount a homestead valuation can be reassessed. This can have a significant impact on what you pay in property taxes when housing prices rebound. (In 2013 the cap amounted to 1.7%). This would mean that if your home last year was valued at $100,000 and the value of the property went up to $120,000 this year, you could only be taxed based on a $101,700 value.
For more information on the specific exemptions and caps to which you may be entitled, visit your local property appraiser’s website.
Income Tax and Gift and Estate Tax
Florida Residents pay no state income tax, no state gift tax, and no state estate tax. Many states levy separate taxes on citizen’s income during their lifetimes and on their estates upon their death. In Florida, this is not the case. This has the potential for saving significant sums of money in taxes for Florida residents vs. residents of states that do impose these taxes.
Florida has about the best homestead creditor protection in the country. In Florida, generally your homestead property is not subject to the claims of your creditors or the creditors of your estate upon your death.
Ways to Establish Florida Residency
As stated before, Florida has no specific one-size fits all approach to determining who is a resident and who is not a resident. As defined in Florida Statute 196.012(18) for purposes of the homestead exemption, residence is the place where a person has his or her true, fixed and permanent home and principal establishment to which, whenever absent, he or she has the intention of returning. A person may have only one permanent residence at a time…
So while there is no clear test to prove one was definitely a resident of Florida, we advise our clients to do as many of the following things as possible to show their intention to become Florida residents:
- Obtain a Florida Driver’s License or Id card and relinquish a drivers license if you have one from another state
- Register a motor vehicle in Florida
- Register to Vote in Florida and become active in community and/or religious organizations
- Declare domicile through a filing in the public records of the county in which you live
- Use a Florida Bank for all or most banking transactions
- Notify anyone with whom you deal to send mail and correspondence to your Florida Residence. This should include the Social Security Administration, the IRS, doctors, financial institutions, etc.
- Declare Florida as your residence in your Last Will and Testament.
My favorite advice for clients who are sports fans is to become avid Tampa Bay Rays and/or Buccaneer fans and disavow old loyalties they may have. So, in summary, while there is no clear rule on what constitutes a Florida resident (and the list above is certainly not all inclusive), it’s a good idea to meet with your attorney(s) to determine if Florida Residency is right for you, and if so, what steps should be taken to establish residency.