The Closing Itself
Investment Property Closings vs. Homestead Closings in Florida
Direct answer
A Florida investment closing and a homestead closing use the same deed, title search, and good funds. Homestead is a permanent residence. The Florida Constitution generally requires a married owner to have the spouse join a deed or mortgage of that residence, even when the spouse is not on the last deed. A rental that nobody claims as a permanent residence does not get that joinder rule, and it does not get the homestead tax exemption. A house, condo, or small rental with nine or fewer units that is not homestead is nonhomestead residential property. After a sale it is assessed at just value as of the following January 1, and later increases on non-school levies are capped at 10 percent. On a residential rental, the seller transfers the tenant's security deposit and advance rent to the buyer with an accounting. Time to Close Title closes the sale. We do not decide homestead, and we do not file the exemption.
Key takeaways
- Calling a house an investment does not remove a spouse if someone still lives there.
- A rental is not the homestead exemption. Renting all or substantially all of a homestead dwelling is abandonment under the tax statute.
- After a sale, a small rental is assessed at just value the following January 1. The 10 percent cap comes after that, and it does not cover school levies.
- Send the leases and the security-deposit accounting with the contract. Florida law moves those residential deposits to the new owner.
- Title premiums follow the state rule. There is no investment surcharge. The policy does not insure the lease or the next tax bill.
Who signs an investment deed that a homestead deed would not?
Everyone whose name is on the current deed. That is true for a rental and for a homestead. The extra signature is the one people skip. If the house is still someone's permanent residence, a married owner generally cannot deed or mortgage it without the spouse, even when the spouse is not on the last deed. Read why both spouses sign. Listing the house as an investment does not erase that fact. If a seller still sleeps there, tell us. We do not drop a spouse because the flyer said rental.
A property that is not anyone's permanent residence does not get that joinder rule. A spouse who is already on the deed still signs. A second home the buyer uses is not a rental, and it is not homestead either. Say which of the three this file is when you send the contract.
| Homestead | Investment rental | |
|---|---|---|
| Who signs | Owner and spouse if married, even if the spouse is not on the deed | Everyone on the deed. A spouse is not added only because it is a rental |
| Tax exemption | Permanent residence, filed with the property appraiser | No homestead exemption on a property that is not a permanent residence |
| Assessment after a sale | Just value the following January 1, then Save Our Homes | Just value the following January 1, then the 10 percent non-school cap if it has nine or fewer units |
| What to send with the contract | Whether anyone lives there, and who the spouse is | Leases, the deposit accounting, and whether anyone still lives there |
| What we do not decide | The exemption or the tax bill | Whether the buyer may rent, or the next tax bill |
Why is the seller's tax cap not the buyer's tax cap?
Homestead under § 196.031 is a permanent residence on January 1. The base exemption is up to $25,000. A further exemption applies to assessed value above $50,000 for levies other than school levies, and that further amount is adjusted for inflation. We do not calculate the bill. A rental that is not a permanent residence does not receive that exemption. Portability of a Florida homestead benefit applies only if the owner had a Florida homestead exemption as of January 1 of any of the three immediately preceding years, and only onto a new Florida homestead. Buying a rental does not receive that transfer.
A sale is a change of ownership. Homestead property is assessed at just value as of January 1 of the year after the sale, under § 193.155. Only then does Save Our Homes, the lower of 3 percent or the change in the Consumer Price Index, limit later increases. A house, condo, or other residential property with nine or fewer dwelling units that does not receive the homestead exemption is nonhomestead residential property under § 193.1554. A change of ownership assesses it at just value as of the following January 1. After that, the annual increase is capped at 10 percent for levies other than school district levies. School taxes are outside that cap. A building with more than nine units is outside that section. The property appraiser applies the section that fits. We do not.
Renting the house you used to live in is its own rule. Section 196.061 says rental of all or substantially all of a dwelling previously claimed as homestead is abandonment, and the abandonment continues until the owner physically occupies the dwelling again. Abandonment after January 1 does not by itself remove that year's exemption unless the property is rented for more than 30 days per calendar year for two consecutive years. Section 196.061(2) has a separate rule for certain members of the Armed Forces. The property appraiser decides the exemption. We do not apply either rule for you.
Not homestead
A rental that is not a permanent residence does not get the homestead exemption.
Next January 1
Just value after a sale. The seller's capped assessment does not move with the deed.
10 percent
Later non-school cap on a nonhomestead property of nine or fewer units. School levies are outside it.
What has to move with the tenant, not just the deed?
Send every lease with the contract. Under § 695.01, a lease for a term of one year or longer is not good against a later purchaser who pays value and has no notice, unless it is recorded. A tenant in the house is a fact the file needs in writing. The title policy does not insure the lease terms, the rent, or that the association allows the rental. Read what title insurance does not cover. An HOA or condo estoppel still has to come in. Rental limits live in the declaration. We do not invent them.
On a residential rental, § 83.49(7) requires security deposits and advance rents held for the tenants to transfer to the new owner, with any earned interest and an accounting of each tenant's account. After that transfer of funds and records, and a written receipt, the seller is released from the duty to hold the money. There is a rebuttable presumption that the new owner received the deposit, and that presumption is limited to one month's rent. We disburse the amount the contract and the accounting show. We do not invent the balance, and we are not the landlord's deposit account. Rent for the month of closing is prorated the way the contract says. We do not publish a formula in place of that contract.
Say whether anyone lives there
A seller who still occupies the house can make it homestead. Name the spouse if there is one.
Send the leases and the deposit accounting
Each tenant, the rent, the deposit, and any advance rent. We use those figures. We do not guess them.
Clear the estoppel and the municipal search
Association charges and city liens are paid from the file. Rental rules come from the recorded documents.
Follow the lender's occupancy instruction
An investment loan and a primary-residence loan are the lender's classification. We do not override it.
Fund, then record
On a sale we close, we record the deed after good funds, in the county where the land sits. Deposit money moves as the accounting requires.
What stays the same on both closings?
Documentary stamp tax follows the consideration on the deed. All parties are liable. The contract says who brings the money. Homestead does not make the deed stamp-free, and a rental does not add a county surcharge we can quote here. Florida title premiums follow the state rule. We do not add an investment surcharge. See what title insurance costs.
Wind, flood, and a landlord policy are not the title policy. We do not bind them. If a qualified intermediary is named in the contract for an exchange, we follow that written instruction. We do not decide whether the sale qualifies, and we do not calculate the tax. Wire instructions are confirmed when you call (352) 792-1214. Read wire fraud at a Florida closing.
On a sale we close, we submit the deed for recording after funding. A quitclaim we only prepare, with no sale closing, is recorded by the client. You can sign at 3087 Anderson Snow Road in Spring Hill. The deed still records in the county where the land sits.
Frequently asked questions
If I call it an investment, can my spouse skip the signing?
Not if someone still lives there and you are married. Homestead joinder follows the permanent residence, not the listing description. If nobody claims it as a permanent residence, the spouse signs only when they are on the deed or the lender requires it. Tell us which it is.
Does a rental get the Florida homestead exemption?
No. The exemption is for a permanent residence. Renting all or substantially all of a dwelling that had the exemption is abandonment under § 196.061 until the owner moves back in. The property appraiser decides the bill. We do not file the exemption.
Will I pay the same property tax as the seller?
Do not count on it. A sale assesses the property at just value as of the following January 1. The seller's Save Our Homes cap does not transfer to a rental. The 10 percent non-school cap on a small nonhomestead property applies after that reset.
What happens to the tenant's security deposit?
On a residential rental, § 83.49(7) moves the deposit and any advance rent to the new owner with an accounting and a written receipt. The presumption that the buyer received it is limited to one month's rent. We disburse the figure in the accounting. We do not invent it.
Does the existing lease bind the buyer?
Send the lease. A lease of one year or longer is not good against a later purchaser for value without notice unless it is recorded, under § 695.01. A tenant in possession is still a fact the contract should state. The title policy does not insure the lease terms.
Does title insurance cost more because it is a rental?
No. Florida title premiums follow the state rule. We do not add an investment surcharge. The policy insures title. It does not insure rent, the lease, or the next tax bill.
Who records the deed?
On a sale we close, we submit the deed for recording after funding, in the county where the land sits. A quitclaim we only prepare, with no sale closing, is recorded by the client. Call (352) 792-1214 or contact us. The office is at 3087 Anderson Snow Road, Spring Hill, FL 34609.