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A great way to roll gains into the next property without ever having to pay taxes,  just keep borrowing against the increased value.  Only caveat is that you have to keep buying more expensive properties, and getting bigger loans.  Otherwise they'll tax you on the 'boot'.  I love that term!

Important Timelines

• Identify second property 45 days after closing the first.

• Close on second property 180 days after closign the first.

See more info here.

While many seemingly vote for higher taxes, no one likes actually paying taxes. One major tax break that is available to homeowners is Florida's homestead property tax exemption. 

The Homestead Exemption and related Save Our Homes (SOS) limitation provide property owners of their permanent residence (or residence of their dependent) up to $50,000 of exemption to the assessed value and a 3% cap on the annual increase of assessed property value.  But, you must apply for the exemption. It is not automatic.  As many of you that have bought your primary home with us know, we provide the online application and a reminder to apply during the window of Jan 1 - March 1.

To better understand how it works, first know that any property has three different values for taxing purposes:

1. The "just" value, which is simply the market value.

2. "The "assessed" value which is the just (or market) value minus the assessment limitations.

3. The "taxable" value which is the assessed value less exemptions and is used to calculate the total property tax.

The homestead exemption may total up to $50,000. The first $25,000 applies to all property taxes. Another exemption of up to $25,000 applies to non-school taxes and assessed values between $50,000 and $75.000.

Once a property has qualified for and obtained the homestead exemption, in following years, the save our homes assessment limitation prevents the assessment from increasing by more than the lesser of 3% or the Consumer Price Index.

If moving to another home, a taxpayer must apply for a new exemption but can transfer the homestead assessment difference so that you continue to benefit from the increased limitations already earned.

Unfortunately, as is typical for government, the consequence of this cap can be irresponsible spending at the local level.  Since the voter/homeowner’s tax burden is capped, they won’t directly feel the full brunt of excessive government spending. This burden unfortunately shifts to business owners, sales taxes, or their all time favorite, municipal debt. 

 Maybe if home owners could feel the real cost of government spending in their property tax, the county and city would be forced to exercise some constraint in spending.  Now wouldn’t that be refreshing!

For more detailed information, please visit the sites below:

• Florida Department of Revenue

• Orange County 

• Seminole County  

• Charlotte County

• A product that is geared toward rental homes, this focuses more on the income potential of the property rather than the income of the owner.  Typically you need more down though on these.  They can be for Americans or Foreigners alike.

• DSCR Loan Explanation

• This is a better option that DSCR loans for investment properties sometimes except....    except..  

  • you can typically only rent it for 180 days and usually can't use a property manager. 

  • You need 20% down.

If you can do those things then a second home loan may work for you.

• Second Home Loan Explanation

The banks won't do this automatically.  You must initiate it

• PMI Removal Explanation

This is the cleanest explanation that I have seen.  It answers the question, can I structure it like this?...  The answer is yes, whatever the General Partner and investors agree on, goes!

• Waterfall Syndication Structure