Homestead Exemption Haven

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Most people only live in one house. Some people may have a vacation house, but generally one home is enough. But alas, not for the fraudsters of Florida, who never cease to amaze me. Today’s ”Fraud of the Day” from NorthEscambia.com, which reports that Escambia County is losing one million dollars annually from property owners who are committing homestead exemption fraud. (One million dollars is a nice chunk of change. How many school teachers or police officer jobs could be funded with that cash?)

The idea of a homestead exemption is pretty simple? some state laws allow home owners to receive property tax relief if they meet certain criteria, such as the home is their primary residence. Also, there is often an age requirement. The purpose of the homestead exemption is to help taxpayers avoid unfair tax burdens. Homestead exemption fraud occurs when taxpayers take advantage of this well-intended tax break to fraudulently receive cash refunds, credits and other reductions using simple techniques, including:

  • Keeping the exemption of a deceased person
  • Having multiple homestead exemptions
  • Claiming an elderly exemption when a person is not elderly
  • Renting a homesteaded property when claiming it as a primary residence

The article reports that there are about 650 homestead exemption fraud cases per year in this county, but luckily the appraiser’s office has recovered as much as $600,000 a year. In the words of the property appraiser? ”Everyone should care about this.” (It’s not just me!)

Our counties are facing tough times and need every dollar available to provide valuable services to citizens. So, what’s the solution? Leverage public records databases and analytics technology to detect potential fraud. Counties are having success using this approach to find fraud, so they can make sure everyone pays their fair share.

Here are the questions for the day? do you think your county has a homestead exemption fraud problem? If so, what are you going to do about it?

Source: Today’s ”Fraud of the Day” is based on the article titled ”Homestead Exemption Fraud Costing Escambia $1 Million a Year” published by NorthEscambia.com on August 8, 2012.

Escambia County is being robbed of up to $1 million annually by property owners committing homestead exemption fraud, Property Appraiser Chris Jones said Tuesday.

”Unfortunately some property owners claim exemptions to which they are not entitled,” Jones said. ”These may include rental or vacation properties, second homes or other properties in which the owner does not reside.”

 

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.