Flagler County Tax Exemption for Granny Flat Probably Not for You
Flagler County passes measure to allow real estate tax exemption for Granny Flats but most will not qualify.
Palm Coast, FL – February 5, 2010 – There is a lot of buzz about Flagler County’s new Granny Flat property tax exemption. In reality, the qualifying standards are very limiting. Most will not pass the test.
What is the tax reduction?
The state passed a bill in 2002 and effective in 2003 which gave counties an option to implement a Granny Flat tax exemption. The exemption is to reduce the tax burden on homesteaded property owners who add to or renovate their home to accommodate a live-in parent or grandparent. Flagler County exercised this option at Monday’s County Council meeting.
If a homesteaded homeowner adds a Granny Flat to their home, they will be eligible for an additional exemption (reduction in taxable assessed value) for the market value of the addition or renovation up to 20% of the total "just (market) value" of the homestead. For instance, if the value of the homestead prior to the improvements was $150,000 and the Granny Flat improvements raise the market value by $50,000, the property owner will be entitled to an additional taxable exemption of $40,000.
$150,000 + $50,000 = $200,000$200,000 X 20% = $40,000
It sounds great, but in reality, few homeowners will qualify. That’s because the qualifying standards are limiting.
To qualify for the credit, the improvements must be to an existing homestead. That means that if the flat is included in new home construction, it does not qualify because the home was not already homesteaded.
You can’t grandfather your grandfather. The CO (certificate of occupancy) for the addition or renovation must be dated on or after January 1, 2009. That means that you can’t qualify an addition completed before that date, even though the state bill was effective in 2003. That’s because counties have to adopt the exemption. Flagler County did not opt in until February 1, 2010.
The parent or grandparent of the homesteader must live as a permanent resident in the addition as of January 1 of the year for which the exemption is claimed. Qualified elderly parents and grandparents must not receive any other benefits requiring a declaration of permanent residency at any other property in any other County or State.
Only parents and grandparents (natural or adoptive) and at least 62 years old on January 1 of the year in which the exemption is claimed can qualify.
If the parent or grandparent dies, moves, or establishes a permanent resident status elsewhere, the exemption is removed and the full value of the improvement will be taxed.
If you have any questions, call the Property Appraisers office at (386) 313-4150
20% or 11.5% go figure !
The cost may be $130 a square foot,but the assessed value may be $80 a square foot as current valuations are calculated due to resales. So every square foot you build for grand parents, is loosing $50 a square foot for resale and then the assesment is only reduced by 20% of the $80 a square foot assessment. So the actual reduction is $80 divided by $130 just a hair over 60% times 20% or 12%. That amounts to the cost of $130 times 12% or $15 a square foot. You still pay taxes on the remainder 100% minus the 12% or $65 dollars a square foot. Which is only $15 less when your cost was $130 dollars to do the addition, for a real reduction of 11.5% of cost, for assesment of taxes. So you put a 600 square foot addition on and it cost 600 times $130 equals $78,000 and a actual resale value of 60% or $42,200 a loss of $25,800. You get to loose money and pay more taxes, what a deal? Now if you buy a bigger already built home with your name and grandparent(s) on it with a life estate, then, you don’t loose the $25,800. That could be a duplex, with seperate living or a big split plan with private baths and even entrance for grandparents.It just doesn’t make much sense to loose the $25,800 to get a reduction of 11.5% on the cost for additional property taxes which would be less than $200 a year savings, on the average Flagler county property.