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Florida Property Tax Exemption
For Affordable Housing



Eligibility

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 - Ownership:   The owner must be an "exempt entity" - meaning:

    • A nonprofit that is exempt under Section 501(c)(3) of the IRS Code or

    • An limited liability company (LLC) that is 100% owned by a 501(c)(3) entity, or

    • For occupied rental units, a limited partnership where the sole "general partner" is a 501(c)(3) entity

    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.

    • Safe Harbor #2: Property being actively developed for affordable housing (where the owner can provide documentation that it is taking "affirmative steps" to prepare the property to provide affordable housing in the future)

    • If the above two "safe harbors" don't apply (for example, with a land banking program), a long shot possibility would be to try and qualify the property under the generic "charitable use" exemption

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 within 25 days of the date that the the owner receives the annual notice of assessed value from the Appraiser in August or September. The late filing must be accompanied by evidence demonstrating good cause for missing the deadline or other extenuating circumstances (CLICK HERE to download the late filing form). If the Appraiser denies the late filing the owner can file the application directly with the Value Adjustment Board (which must also be done within the same 25 day deadline mentioned above)
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. Such an appeal must be requested within 30 days after issuance of the denial notice (this appeal deadline is stated in the small print near the bottom of the denial notice)


Preparing the Application

Where do you put the Narrative on the Application?: Question #9 on form DR-504 asks you to describe the "use of the property". Please note that there is not enough space on the application form to provide an adequate answer. Applicants should should simply type "see attached" and then attach a narrative describing in detail the exempt use of the property

Objective of the Narrative: Your narrative must establish that the property meets the two part eligibility test:

  • OWNERSHIP: The property must be owned by an nonprofit "exempt entity". Click here for the statute that defines the term "nonprofit". The owner doesn't necessarily need to be 501(c)(3) but it certainly helps.

    • Note: The statute allows the property to be owned by a limited liability company (LLC) provided the LLC is wholly owned by a qualified nonprofit "exempt entity".

  • USAGE: The property must be USED for a "charitable purpose".

Three approaches to writing the narrative, depending on your situation
  • 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.

      • Property under this particular safe harbor can qualify even if it is NOT owned by 501(c)(3) entity provided that it is owned either by a limited liability company (LLC) in which the sole "member" is a 501(c)(3) entity or a limited partnership where the sole "general partner" is a 501(c)(3) entity.

  • 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. The property must be owned either by a corporation that is exempt under section 501(c)(3) of the IRS Code, OR, a limited liability company (LLC) that itself is wholly owned by such a 501(c)(3) exempt entity (CLICK HERE to see the statute that says this).
    • .
  • 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 #9 on exemption application (DR-Form 504)