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State and Local Governments scraped for cash are cracking down on Homeowners who are improperly claiming the Homestead Exemptions in States that offer the sizable Property Tax Discounts as well as protection from Creditors in a Bankruptcy.  While trying to uncover the “cheats” State officials are finding that many deserving qualified Homeowners fail to apply.

Here  in Florida the Homestead Exemption, once approved, will reduce your property valuation by $ 50,000.00 for general property taxes and a reduction of  $ 25,000.00 valuation for School Taxes.   Along with no State Income Tax Florida is a great place to own your Primary Residence.  To qualify you must have a Declaration of Domicile filed with the Clerk of the Circuit Court; a Florida Voters Registration Card; all vehicles must be registered in Florida; a Florida Driver’s License (if applicable); and if the property is owned by Husband & Wife Florida residency information should be filed for both. (see www.ccappraiser.com/exemption.asp )

Tax officials, consumer credit counselors, and bankruptcy lawyers often note that homeowners often do not claim their rightful deduction on their property taxes and are often unaware that a homestead is often legally protected from creditors in a bankruptcy (not a foreclosure) proceeding where the home is entirely protected from seizure from unsecured creditors.  Another situation where the homeowner is not aware of his/her lawful exemptions occurs if the homeowner pays his/her property taxes monthly to the institution that is holding the mortgage not knowing that the paperwork must be filed with the county for the exemption to be granted.

Tax authorities in Florida among other States elsewhere (New York, Ohio, South Carolina, Georgia, Texas, Mississippi and Washing D.C.) have stepped up efforts to recoup and stop fraudulent claims.  As of three months ago, LexisNexis, the information service company, has been working with tax officials to cross reference homestead registrations with multiple public records data-bases to find inconsistancies such as; a driver’s  license or a voting record in another state.  For example in the city of Hallandale, Fl. the City Manger in two months, has recouped 85 million dollars of taxable property to the tax rolls and collected $1.2 million in back taxes.

So be careful, claim your rightful exemptions and look to the internet: “ homestead exemption” and your state to guide you.

excerpted from the New York Times 09/02.2010 article by Kate Murphy