At Commissioner Smith’s request, county to seek longer state timeline for retaining homestead exemptions after voluntary demolition and rebuilding

Owners of houses lost to natural causes have three years, but those constructing new houses have only 12 months

Commissioner Mark Smith. Image courtesy Sarasota County Government

During the Sept. 12 Sarasota County Commission meeting, Commissioner Mark Smith won consensus of his colleagues in a request to add a homestead exemption issue to the board’s legislative agenda for the 2024 session of the Florida Legislature.

“It was brought to my attention,” Smith began, “that if a residence is demolished voluntarily and [the owners] don’t rebuild and move in within 12 months, they lose their homesteading.”

He was referring to the state law that limits increases in the annual property tax on homes that are owner-occupied.

As the Florida Department of Revenue explains, “When someone owns property and makes it his or her permanent residence or the permanent residence of his or her dependent, the property owner may be eligible to receive a homestead exemption that would decrease the property’s taxable value by as much as $50,000.”

The department also notes, “After the first year a home receives a homestead exemption and the property appraiser assesses it at just value, the assessment for each following year cannot increase more than 3 percent or the percent change in the Consumer Price Index (CPI), whichever is less.”

The state law Smith referenced is Florida Statute 196.031.

Smith noted that state law provides that if a home is destroyed by fire or a storm, for example, the owners have three years to rebuild and move in, to keep their homestead exemption.

The applicable section of the statute is (7): “When homestead property is damaged or destroyed by misfortune or calamity and the property is uninhabitable on January 1 after the damage or destruction occurs, the homestead exemption may be granted if the property is otherwise qualified and if the property owner notifies the property appraiser that he or she intends to repair or rebuild the property and live in the property as his or her primary residence after the property is repaired or rebuilt and does not claim a homestead exemption on any other property or otherwise violate this section.”

Smith pointed out to his colleagues, “With today’s climate of labor shortages and material shortages, it’s impossible, quite frankly, to build a custom home in 12 months.”

An architect with decades of experience, Smith added that he used to tell clients they could expect to complete a new home within 10 to 12 months. However, he said, the timeline these days is “closer to 18 months.”

Property Appraiser Bill First. Image from the Property Appraiser’s Office website

He had talked with Sarasota County Property Appraiser Bill Furst, Smith continued. Furst agreed with him, Smith said, about the need for a change in the state law to allow a longer timeline for owners to construct a house and move in after voluntarily demolishing their prior residences.

When Chair Ron Cutsinger asked for clarification in regard to whether Smith believes the timeline for such action should be three years, as well, Smith replied, “Yes.”

“I think it’s very logical,” Commissioner Mike Moran said of Smith’s proposal. “There might be nuances, as it goes down the road,” Moran added of the proposed amendment to state law. If some issue arose that made the board members feel their proposal needed a tweak, Moran suggested that they could address it at that time.

Commissioner Neil Rainford agreed with Smith, as well. “It has to be longer than two years,” he said of the timeline for rebuilding after voluntary demolition. “Some of these houses are massive.”

With no disagreement voiced about Smith’s proposal, Cutsinger told County Administrator Jonathan Lewis that he had board consensus to add the item to the 2024 legislative agenda for the county.

The 2024 session of the Florida Legislature is scheduled to begin on Jan. 9 and end on March 8. Committee work begins months before the session starts, as county governmental relations staff has pointed out to the commissioners. The Florida House has set a Nov. 21 deadline for all members to submit at least part of their bills for the session.