Real estate that is used (or planned to be used) as affordable housing can possibly qualify for Florida property tax exemption provided the requirements are met. To qualify the property must meet a two part test:
Test #1 - Owned by "Exempt Entity": The sole owner must be an "exempt entity". To qualify the owner must be one of the following:
The entity must be a "nonprofit". The statute has a long an convoluted definition of the term "nonprofit" but it essentially boils down to having 501(c)(3) exempt status (though it is theoretically possible for a nonprofit without such status to qualify so long as it can plug itself into the definition) - CLICK HERE to see the statute, or
It must be a limited liability company (LLC) that is 100% owned by an exempt entity - CLICK HERE to view the statute, or
To qualify for the "homes for the aged" exemption (see Safe Harbor #3 below) the owner, in addition to being either an exempt entity or a qualified LLC, may also be a limited partnership with a sole "general partner" that is a 501(c)(3) entity. CLICK HERE to view the statute.
Test #2 - Exempt Use: The property must actually be used for an exempt purpose
Safe Harbor #1: Occupied rental property where the rents are affordable and the tenants have income that does not exceed the limit. CLICK HERE to view the relevant statute
Safe Harbor #2: Property is being actively developed for affordable housing (where the owner can provide documentation that as of the key date it had been taking "affirmative steps" to prepare the property to provide affordable housing in the future). CLICK HERE to view the relevant statute
Safe Harbor #3: "Homes for the Aged". The property is occupied by qualified elderly tenants. CLICK HERE to view the relevant statute
"Charitable Use": If none of the above "safe harbors" apply (for example, the property is vacant land being held for future affordable housing BUT as of the key date there had not been any "affirmative steps" taken to develop it) a long shot possibility would be to try and qualify the property under the generic "charitable use" exemption. CLICK HERE to view the statutory definition of "charitable use".
The Application and Appeal Process
Key Date: January 1st is key date for determining whether property will be classified as exempt for any particular year - on that date the property must owned by an "exempt entity" and be used for an "exempt purpose"
Application Deadline: The deadline to apply for the exemption is March 1st of the year for which the exemption is sought. Click Here to download the exemption application (form DR 504).
Late filing with the Appraiser is possible but it must be done by a deadline in mid-September each year. The exact deadline date is stated in the Notice of Proposed Property Taxes, commonly known as the “TRIM Notice”, which is mailed to all property owners in Miami-Dade County by the end of August. The late filing must be accompanied by evidence demonstrating good cause for missing the deadline or other extenuating circumstances. If the Appraiser denies the late filing the owner can file the application directly with the Value Adjustment Board (which must be done by the same deadline mentioned earlier in this paragraph)
Appeals. If an exemption is denied the Appraiser will send a notice to the owner (usually in July). As is indicated on the notice, the owner can ask for an informal meeting with the Appraiser's office to discuss the denial. Whether or not the owner asks for such a meeting an appeal can be made to the Value Adjustment Board using Form DR-486. The appeal can also be filed on-line following the instructions contained on this page. Such an appeal must be requested no later than the deadline date stated in the TRIM Notice. It could be many months, however, before the appeal is actually heard (depending on the backlog). The hearing is not held before the full board. Instead, the hearing is conducted by an administrative judge with a tape recorder (a staff member from the Appraiser's office will also be present). If there is a favorable ruling a refund can be applied for if the taxes were paid.
Preparing the Application
CLICK HERE to download the application form (DR-504)
Describing the Exempt Use: Question #4 on the application asks "what is the property used for?". Note that there is not enough space to provide an adequate answer. Applicants should should simply type "see attached" and then attach a narrative that describes the exempt use of the property (below are some links to sample narratives).
Objective of the Narrative: Your narrative must establish that the property meets the two part eligibility test:
OWNERSHIP BY EXEMPT ENTITY: See the discussion above about what an exempt entity is.
If the Applicant is a nonprofit describe why it is a qualified "exempt entity". Be sure to attached to the application a copy of the relevant IRS 501(c)(3) determination letter.
If the Applicant is an LLC explain in the narrative that its sole member is a qualified nonprofit exempt entity. Attach to application a copy of the exempt entity's IRS determination letter and the LLC's operating agreement (so as to document that the nonprofit is its sole member). If the LLC does not have an operating agreement CLICK HERE to download a template that can be edited and then adopted by the LLC.
EXEMPT USAGE: Describe in detail the what the property was being used for on January 1st of the tax year in question.
SAFE HARBOR #1 - OCCUPIED RENTAL UNITS: Property that is occupied by eligible low income tenants that are actually paying affordable rents can be deemed to have a charitable use. Partial exemptions are possible if only some of the units qualify. Click Here to see the statutory requirements.
SAFE HARBOR #2 - "AFFIRMATIVE STEPS" - Even if there are currently no occupied rental units on the property, it can be considered being used for charitable purposes if the exempt owner has taken "affirmative steps" to prepare the property to provide affordable housing to low income persons in the future. CLICK HERE to see the statutory requirements.
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SAFE HARBOR #3 - "HOMES FOR THE ELDERLY" - the narrative should explain how the property meets all of the qualification requirements spelled out in the statute. (note, the sample narratives below do NOT include one for this particular safe harbor)
GENERIC "CHARITABLE USE" EXEMPTION - Other properties not covered by one of the above mentioned safe harbors must can possibly qualify under the generic "charitable" use exemption. Click Here for the statute. This might include vacant land that is being held for future development.
Sample Narratives - for answering question #4 on exemption application
Safe Harbor #1 - Occupied single family house used as rental property
Safe Harbor #2 - Currently unoccupied but where the owner is taking actual "affirmative steps" to create affordable housing.
Generic "charitable use" exemption - Use this sample narrative when none of the above "safe harbors" are relevant but where it could still be argued that the use of the property is "charitable". For example, holding land for future development but with no "affirmative steps" yet being taken to develop.
