Frequently Asked Questions Miami Beach Homes and Taxesg

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Frequently Asked Questions Miami Beach Homes and Taxes

Friday, October 30, 2009

Frequently Asked Questions about Miami Beach Real Estate

 

Q: How long do you need to own a Miami Beach home in order to be exempt from paying capital gains tax when reselling it?

 

A: If the home is your primary residence  you have lived there for 2 of the previous 5 years, you can exclude up to $250,000 of your capital gain ($500,000 if your married filing jointly) and you/spouse qualify.

 

Q: What is the Florida Homestead Exemption?

 

A: Florida Law entitles every person, who has legal or equitable title to real estate and maintains it as his/her permanent residence, to apply for a $25,000 homestead property tax exemption.  Basically, take the assessed value of your property and subtract $25,000. You will be taxed on the remainder. You do need to apply for the exemption annually through the Miami-Dade Property Appraiser.

 

Q: How much will I pay in property taxes on a Miami Beach home?

 

A: Don’t be fooled by looking at the property taxes the current owner is paying. The current owner started paying taxes based on the assessed value of the home at the time of purchase. As a result of Amendment 10 in the Florida Constitution, the government can only raise the assessed value of properties with Homestead Exemption 3% per year. When the property is sold, the appraiser will assess the home at its full value and the new owner will pay taxes based on this amount.  The Miami-Dade property appraiser’s site is the best resource for your tax questions at http://www.co.miami-dade.fl.us/pa/. They even have a property tax estimator.

 

Q: What is a 1031 tax deferred exchange?

 

A: In a typical real estate transaction, the property owner is taxed on any gain realized from the sale. However, through a Section 1031 Exchange, the tax on the gain is deferred until some future date. A tax-deferred exchange is a method by which a property owner trades one or more relinquished real estate properties for one or more replacement properties of "like-kind", while deferring the payment of federal income taxes and some state taxes on the transaction.

 

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