keith Burt
Broker Associate
If you own property in St. Petersburg or anywhere in Florida, you've probably heard about the homestead tax exemption. It's one of the best financial perks of calling the Sunshine State home.
But here's a question I get more often than you'd think: What happens to my homestead exemption if I put my house in a trust?
It's a fair concern. Estate planning is smart. Trusts are powerful tools. But nobody wants to lose thousands of dollars in tax savings just to get their affairs in order.
So let's break it down, no legalese, no fluff. Just the straight answer on whether a trust can claim homestead tax exemption in Florida and what you need to know to protect your benefits.
The Short Answer: Yes, But With Conditions
Here's the deal: a trust itself cannot claim homestead exemption. Trusts aren't people. They don't live in houses or pay property taxes out of their own pockets.
But, and this is the important part, a person who is a beneficiary of a trust can absolutely claim the exemption on property held in that trust. You just have to meet specific requirements.
The most common scenario where this works? A revocable living trust.
If you're the grantor (the person who created the trust) and you retain the power to amend or revoke it during your lifetime, you can still qualify for the Florida homestead exemption. Why? Because legally, you never really gave up your stake in the home. You're still in control.
This is great news for anyone doing estate planning in St. Petersburg real estate or anywhere else in Florida. You can enjoy the benefits of a trust , like avoiding probate and streamlining asset transfer, without sacrificing your homestead savings.
What Makes a Trust Qualify for Homestead Exemption?
Not every trust setup will work. Florida law is specific about what needs to be in place for a beneficiary to claim the exemption on trust-held property.
Here are the key requirements:
1. Beneficial or equitable title to real property for life, You need an actual interest in the real estate itself, not just a claim to personal property or trust proceeds.
2. Present possessory interest, You must have the legal right to live in and occupy the home. It can't just be on paper.
3. Primary residence, The property has to be your permanent home. Vacation homes, rental properties, and investment units don't qualify.
For revocable trusts specifically, the grantor typically checks all these boxes as long as:
- They remain the beneficiary of the trust
- They retain the power to amend or revoke the trust
- They continue living in the home as their primary residence
If you've set up your trust correctly and you're still living in the house, you're generally in good shape.
The Benefits You're Protecting
Let's talk about why this matters so much. The Florida homestead exemption isn't just a nice-to-have , it's a serious financial benefit that adds up year after year.
$50,000 Property Tax Exemption
The standard homestead exemption reduces your home's taxable value by up to $50,000. The first $25,000 applies to all property taxes, including school district taxes. The second $25,000 applies to non-school taxes on assessed values between $50,000 and $75,000.
For most homeowners, this translates to hundreds, sometimes over a thousand, dollars in annual savings.
Save Our Homes 3% Assessment Cap
This one is huge, especially in a hot market like St. Petersburg real estate.
Once you have homestead exemption, your property's assessed value can only increase by 3% per year (or the Consumer Price Index, whichever is lower), regardless of how much the market value climbs.
In neighborhoods where home values have jumped 10%, 15%, or more in a single year, this cap protects you from skyrocketing tax bills. Over time, the gap between your assessed value and market value can become substantial.
Lose your homestead exemption? That cap resets. And you could be looking at a much bigger tax bill.
Creditor Protection
Florida's homestead laws also offer asset protection. Your primary residence has significant protections from creditors and judgments. When your home is in a properly structured trust, you can often maintain these protections while also enjoying the estate planning benefits.
The Trust Language Matters, A Lot
Here's where things can go sideways if you're not careful.
The way your trust is written determines whether you keep your homestead exemption. Generic trust templates or poorly drafted documents can accidentally disqualify you.
Your trust needs to include specific language that:
- Grants you (the beneficiary) a beneficial interest in the real property for life
- Gives you the present right to possess and occupy the property
- Clearly identifies the property as your primary residence
If the trust language is vague, ambiguous, or just doesn't address these points, the county property appraiser could deny your exemption claim.
This isn't the place to cut corners. Work with an estate planning attorney who understands Florida homestead law and can draft (or review) your trust to make sure the language is airtight.
Land Trusts: A Different Story
I should mention this because it comes up often, land trusts are not the same as revocable living trusts, and they're treated differently under Florida law.
In a land trust, the trustee holds both legal and equitable title to the property. The beneficiary only holds a personal property interest , not a real property interest.
Since the Florida homestead exemption requires an interest in real property, the beneficiary of a land trust typically does not qualify for the exemption.
The trustee might qualify if they actually live on the property as their permanent residence, but that's a pretty unusual situation.
If you're considering a land trust for privacy or liability reasons, just know that the homestead exemption picture gets more complicated. Talk to your attorney about the tradeoffs.
What About the Paperwork?
Let's say you already have homestead exemption and you're transferring your home into a revocable trust. What happens next?
You'll likely need to:
- Update the deed to reflect the transfer into your trust (make sure it clearly indicates the property is going into your revocable trust)
- Notify the property appraiser's office, some counties require you to file a new homestead exemption application or provide documentation about the trust
- Keep records of the trust document showing you as the beneficiary with a life interest
Requirements can vary slightly by county, so check with your local property appraiser's office to make sure you've covered all the bases. In Pinellas County, they're generally pretty helpful about walking you through what's needed.
My Take: Don't Skip the Attorney
Look, I'm a real estate guy, not an estate planning attorney. And that's exactly why I always tell clients: get professional legal advice before making moves like this.
The intersection of trusts, homestead exemption, and Florida property law has a lot of nuances. One wrong word in a trust document can cost you thousands in lost tax savings. And trying to fix it after the fact is always more expensive and complicated than doing it right the first time.
If you're buying a home in St. Petersburg and thinking about putting it in a trust from day one, or if you already own and want to add estate planning into the mix, spend the money on a qualified attorney. It's worth it.
The Bottom Line
Yes, you can claim Florida homestead tax exemption on property held in a trust: as long as it's structured correctly.
A revocable living trust is usually your best bet. You keep control, you keep the tax benefits, and you get the estate planning advantages you're looking for.
Just make sure:
- You're the beneficiary with a life interest in the real property
- You live in the home as your primary residence
- The trust language specifically supports homestead qualification
- You've consulted with an estate planning attorney who knows Florida law
Protect your exemption. Protect your savings. And if you have questions about buying or selling in the St. Petersburg real estate market while navigating trust ownership, I'm happy to help point you in the right direction.