The Duval Property Appraiser is asking for help cracking down on homestead-exemption fraud.
Homeowners can claim the exemption for their primary residence, and fraud occurs when people claim it on more than one property.
The City Finance Committee approved a bill Monday allowing an outside contractor to assist in identifying false claims.
Property Appraiser Jerry Holland says most people don’t intentionally commit homestead-exemption fraud. Sometimes people get married and keep the exemption on two properties.
Another example, he says, is "someone may own a second home outside of the state or in the state and try to claim an exemption on both of the homes."
He says those out-of-state claims are hard to catch, which is why an outside agency specializing in data research would be helpful. Other property appraisers in Florida who use an outside source estimate the extra help uncovers an additional 1 or 2 percent of fraud cases. Jacksonville has 190,000 exemption claims.
“Between 1 and 2 percent is somewhere between close to 2,000 and 4,000 potential properties that would have these exemptions,” Holland says. “That would mean somewhere between $7 million and $12 million that people would owe for these back taxes and penalties.”
Once fraud is found, a lien is put on the property. The outside company would earn up to 28 percent of that lien, which includes back taxes, penalties and interest. The company wouldn’t collect money from fraud cases it doesn’t uncover.
“There’s nothing to lose if they can find things that we can’t find,” Holland says.
Homestead-exemption fraud can be penalized up to 10 years back. The owner has to pay the back taxes, a 50 percent penalty and 15 percent interest rate.
People who claim the homestead exemption are able to keep the assessed value of their homes down. When the exemption is removed, the home goes back to the market value, increasing tax revenue.
Since Holland took office in July, his staff has put liens on 417 properties and collected over $1 million. In the eight months prior, only 155 properties were liened.
On Tuesday, the City Council's Rules Committee will look at the homestead bill. Committee votes serve as recommendations for the full Council.
Photo used under Creative Commons license.
