When money got tight, one couple decided to rent parts of their home on Airbnb. The county then took away their homestead exemption. So, is that legal? It’s why they called Help Me Howard with Patrick Fraser.
If you want to get away from the hectic South Florida life, head south toward Homestead.
The Polacos did.
Vilma Polaco: “We needed a place to raise the kids. We were like, ‘This is it,’ so we moved in back then.”
That was 26 years ago. The kids grew up, the house grew quiet, but then Erasmo got hit with a heart problem.
Vilma Polaco: “They tell you, ‘Prepare yourself for three months of crisis.’ But the doctor said, ‘No, six months of crisis.’”
With no money coming in, in 2018, a friend had an idea for the Polacos: rent the kids’ empty bedrooms on Airbnb.
Vilma Polaco: “And it turned out to be a very good income, getting a lot of pressure off his back.”
Their Airbnb listing says the “entire home” is available, but Vilma says she and Erasmo still live in the master bedroom. The guests rent the empty bedrooms and can then access other parts of the house.
Vilma Polaco: “We have that little sign that says there, ‘Be our guests,’ to sit in the living room, to sit in the dining room if you need to.”
Since this is a Help Me Howard, you know what comes next: a letter.
Vilma Polaco: “‘We’re not giving you homestead because you’re using your whole house for Airbnb.’”
After someone apparently complained, the Miami-Dade Property Appraiser took away their homestead exemption all the way back to 2018.
Vilma appealed the decision.
Inspectors came to their house. It didn’t go well.
Vilma Polaco: “You are trying to solve the problem with the very same peers that are accusing you.”
The property appraiser’s office concluded the entire house was rented out, writing: “The kitchen dining room and living rooms were also exceptionally neat featuring non familial artwork.”
Vilma Polaco: “So yeah, I’m not a typical grandma that has all the big pictures around the house. I’m not, you know, I’m not old school.”
Their appeal to restore their homestead exemption was denied. Without it, the Polacos’ annual taxes went from around $2,000 to $7,000, and they had to pay about $15,000 in back taxes.
Vilma Polaco: “We’re two senior citizens. We cannot be in this predicament.”
No homestead exemption. Lots of back taxes after they listed their home on Airbnb.
Vilma Polaco: “This is not only us; if they get away with this, they’re gonna do this to anybody.”
Well, if you rent your home through a place like Airbnb, can you lose your homestead exemption? Howard?
Howard Finkelstein, 7News legal expert: “Yes, you can, but not all of it, unless you rent the entire home. If you still live there, you lose a portion of your homestead exemption. You keep your exemption on what you use exclusively, but the courts have not ruled whether you keep your exemption on things like the kitchen and living room that you share with a renter.”
We contacted the Miami-Dade Property Appraiser’s Office.
We were told the listing that says “entire home,” plus the inspection they did, indicated the owners didn’t live in the house, and that’s why they were stripped of their homestead exemption.
The case then went to mediation. The county offered to restore 17% of the homestead exemption.
The Polacos wanted 50% restored and wanted to fight for it, but the judge signed the 17% offer in a final order, surprising the Polacos.
Erasmo Polaco: “And then you guys told us, yesterday, that we had a final judgment, so we were puzzled.”
The Polacos say they won’t give up and will keep fighting.
Erasmo Polaco: “I think this law is outdated. It was written before short-term rentals, and it needs to be adjusted.”
Airbnb was a lucrative idea for them, until it wasn’t.
And you cannot appeal a settlement after the judge signs it. A deal is a deal, but the Polacos can fight in court to get their homestead exemption increased for the future.
One more thing: be aware that property appraisers are looking for homes listed on Airbnb and Vrbo. You could lose part of your homestead exemption or all of it.
A problem living rent-free in your head? Ready to exempt it from your life? Air it out with us, ’cause we have plenty of room to help.
With this Help Me Howard, I’m Patrick Fraser, 7News.
