Homestead Tax Exemption Example. Let's say a surviving spouse chooses to use the homestead exemption for the current tax year.The homestead can't exceed one acre in a city or 160 acres in a rural area. This can provide asset protection from creditors for at least some of house's value. Filing for Florida's Homestead Exemption can offer you tax savings when you own real estate in Florida. Homestead tax exemptions allow homeowners to lower the amount of property taxes they pay. These exemptions might be based on a percentage of the home's value.