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With all of the international investors purchasing condos and homes in South Florida, the question arises as to whether a person who is not a green card holder or a US citizen may claim the protections and benefits of Florida “homestead”. For a general overview of homestead please see our previous article here.
Non-immigrants are those people in the US who do not have either a green card (permanent residence) or US citizenship. Non-immigrant categories include the B visa, E visa, L visa, O visa, H-1B visa, among many other non-immigrant visa categories.
Qualifying your home as a “homestead” affords many advantages such as limiting the increase in property taxes to a maximum of 3% per year and protecting the home from creditors. However, not everyone can claim homestead on a Florida home even if they are living in the home full time as shown below.
To qualify your home as homestead you must be able to make your home your “permanent residence”. Therefore, if you are a non-immigrant investor without a green card or US citizenship you may not qualify for the homestead exemption.
In 1963 the Florida Supreme Court found that a non-immigrant could not receive the protections and benefits of Florida’s homestead laws since the applicant was a non-immigrant. See Juarrero v. McNayr, 157 So. 2d 79 (Fla. 1963). This means that if a homestead applicant does not hold either a green card or US citizenship, then typically the applicant will not be able to qualify their Florida home as a homestead because they cannot form the intent to reside in Florida permanently. The reason is that the applicant is limited in the amount of time that they can stay in the US due to their non-immigrant status.
However, a non-immigrant who has US citizen children or spouse may potentially claim the homestead exemption for the benefit of their US citizen family members. The Florida Supreme Court addressed this issue in Garcia v. Andonie, 101 So. 3d 339 (Fla. 2012) where the Court found that a married couple from Guatemala in E-2 visa status could claim homestead on their Florida home, but only because the couple had US citizen children.
It is also worth noting that certain US visas require that the holder not have what is called “immigrant intent”, or the intent to make the US his or her permanent home. Therefore, claiming the Florida homestead protection could potentially have adverse consequences on immigration benefits.
The story is not all glum, since even an investor in non-immigrant status may not be able to qualify his or her residence as a Florida homestead, the annual property taxes are currently capped at a maximum increase of 10%. This means that if your property value increases by 25% in a year, the maximum amount that your property taxes could increase is only 10%. And if one year the value increases by less than 10%, the tax will only reach the amount of such increase.
If you would like to review your ownership structure, tax plan, or immigration plan feel free to reach out to the attorneys of PRA Law.