By GAIL LIBERMAN
Sunday, April 23, 2006
Thinking about trading in the mansion for a new-style, low-maintenance condo hotel?
Although this idea sounds awfully tempting, buying into this concept could cost you an increasingly valuable Florida commodity - your Florida homestead exemption.
With Florida's homestead exemption, the first $25,000 of your primary home is exempt from property taxes. But more importantly, the Save Our Homes amendment dramatically limits the annual increase in your assessment to 3 percent annually, as of this year.
Condo hotels typically are luxurious high-rises with concierge services that you can rent out for income while you're away. If you travel a lot, this seems like an attractive benefit.
But Palm Beach County Property Appraiser Gary Nikolits tells me that once you lease your unit, your homestead exemption could be gone along with you. Also, he warns, if you rent out any property, there's a good chance you also may need an occupational license.
Buy a unit in a condo hotel, he says, and your management company already may have an occupational license.
However, "It can't be an income-producing property and be your residence!" Nikolits asserts.
True, according to Nikolits, courts have been liberal in their interpretations of the homestead exemption. For example, he says, there was one case, involving a single family home, in which someone qualified for a homestead exemption on Jan. 1, was called out of the country on business, and returned before the end of the year. The court allowed the homestead exemption.
But even if you can get away with it once, "you can't lease it in a subsequent year," Nikolits warns.
Meanwhile, as we head toward Mother's Day and wedding season, diamonds may be on your mind.
Here's an update on some of the hot issues surrounding these best friends of ours.
As you probably know, one of the greatest controversies is over "conflict diamonds." These are diamonds in which billions of dollars in profits fund conflicts launched by terrorist regimes.
Fortunately, some 40 countries, the United Nations and the diamond industry have worked out a way to help curb sales of conflict diamonds. Under a program, known as the "Kimberley Process," diamonds must be shipped in tamper-resistant containers. They also must be accompanied by government-validated Kimberley Process certificates. In addition, the jewelry industry, represented by the World Diamond Council, requires that every time a diamond changes hands, the seller affirm on the invoice that the diamonds have been purchased through authorized channels. The United States' Clean Diamond Act signs onto this process.
But too many countries have no strong enforcement mechanisms," says Amy O'Meara, of Amnesty International USA, New York. Also, she says, a lot of jewelers haven't adopted the code of conduct or produced written guarantees as to where the diamonds have come from.
If you're looking for a diamond, she suggests asking the jeweler how you can be sure the jewelry doesn't contain conflict diamonds. Ask to see a code of conduct. Also ask the jeweler to provide a voluntary warranty that documents the diamond from the mine to the point of sale as being conflict free.
"A lot of jewelers can talk a good game," she says.
Always ask for written specifications or an appraisal of the diamond you are considering. Obtain a written guarantee from the jeweler.
"We recommend that the consumer ask all the questions they can of the salesperson," says Janice Frankle, attorney with the Federal Trade Commission Division of Enforcement. "If the salesperson doesn't have the answer, find the answer."
Deceptive claims are prohibited.
Also carefully examine materials upon which a diamond sits. Take platinum, for example. Karat Platinum LLC, citing rising costs, has asked the Federal Trade Commission for guidance on how to mark or describe a lower-cost form of platinum.
The alloy has between 500 and 850 parts per thousand pure platinum and no other platinum group metals. A new rule on this is expected shortly.
Other questions to ask:
• Is the diamond artificial?
• Has the diamond been treated? Jewelers are required to disclose whether a diamond has been treated with anything that could lower its value.
• Does the diamond require special care?
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