Not all states offer homestead exemptions for property taxes, and those that do don’t use the same formulas. However, the formula for calculating the amount of your property taxes after the homestead exemption is factored in is fairly straightforward no matter where you live. It’s simply a question of knowing the rules that apply in your state or local jurisdiction. To benefit from the homestead exemption, it is crucial to file the exemption form by the deadline imposed by your county or local tax assessor. If you miss filing your homestead exemption by the due date, you’ll have to pay the full amount of property taxes on your residence until you file the homestead exemption for the following year.
Calculating your property taxes after taking into account your homestead exemption is relatively straightforward. After subtracting your exemption amount from your property's assessed value, you can multiple the new sum total by the decimal-formatted property tax rate to determine exactly how much you will pay.
Homestead Exemption Calculator
States create homestead exemption laws for two reasons. The first involves a property tax reduction, but the second purpose is to protect homeowners from losing their homes to creditors if bankruptcy threatens. Homestead means just that – it affects only your principal residence. Homestead exemptions are not available for second residences or vacation homes. Homestead exemptions generally work this way: If your home is assessed at a certain value, the exemption reduces the value by a particular amount, and that amount is used as the basis of your property tax payments. For example, if your house is assessed at $395,000, and you receive a $25,000 homestead exemption, you pay taxes on a house assessed at $370,000.
Once you determine the amount of the homestead exemption, figuring out your property taxes is a matter of subtracting the amount of the homestead exemption from your home’s assessed value, determined by your municipal tax assessor. Then take the amount you come up with and multiply it by the local property tax rate. For example, Florida real estate taxes are among the lowest in the country, but your tax rate will vary depending on the county. If you live in Palm Beach County in a house valued at $370,000 after the homestead, your property taxes are $4,851, based on the average tax rate of 1.311 percent. If you live in a house with the same evaluation in Miami-Dade County, you will pay $4,736 in property taxes based on a rate of 1.280 percent.
If you need help figuring out your property tax after deducting a homestead exemption, contact your local property tax assessor for assistance. You can find your local property tax rate on your tax bill, and your town or county should also have the information on their websites.
Exceptions to Homestead Exemption Amounts
Homestead exemption amounts are not necessarily the same, even for people living in the same neighborhood in similar houses. Depending on state law, the exemption can depend not only on the property’s assessed value, but on the age of the homeowners. In some states, senior homeowners are eligible for homestead exemptions, but younger homeowners are not. Homeowners of any age with disabilities may also receive a homestead exemption even if other homeowners do not qualify.
Homestead Exemption Changes for 2018
Several cities are considering adding or changing the homestead exemptions for their area in 2018. Jacksonville, for instance, is considering a homestead exemption for its residents. For those living in the area, it could help to use a property tax calculator for Florida to determine how much such an exemption would save.
Filing Your 2017 Taxes
If you're filing your 2017 taxes, it may be worthwhile to do a checkup to determine whether you can file a homestead exemption in your area. Although you can't file retroactively, you will at least have the form in place for the next deadline.
- Comptroller of Texas: Residence Homestead Exemption Frequently Asked Questions
- Georgia Department of Revenue: Property Tax Exemptions
- Asset Protection Planners: Homestead Exemptions by State and Territory
- Harris County Appraisal District: Property Tax Exemptions for Homeowners
- SmartAsset: Overview of Florida Property Taxes
- Congressional Research Service. "Homestead Exemptions in Bankruptcy After the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)," Summary Page. Accessed April 17, 2020.
- Institute on Taxation and Economic Policy. "Property Tax Homestead Exemptions." Accessed April 17, 2020.
- Connecticut General Assembly, OLR Research Report. "State Homestead Exemption and Credit Programs." Accessed April 17, 2020.
- Congressional Research Service. "Homestead Exemptions in Bankruptcy After the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)," Pages 4-46. Accessed April 17, 2020.
- Congressional Research Service. "Homestead Exemptions in Bankruptcy After the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)," Pages 9 and 41. Accessed April 17, 2020.
- U.S. House of Representatives, Office of the Law Revision Counsel. "11 USC 522: Exemptions." Accessed Feb. 2, 2020.
- Federal Register. "Revision of Certain Dollar Amounts in the Bankruptcy Code Prescribed Under Section 104(a) of the Code." Accessed Feb. 2, 2020.
- Congressional Research Service. "Homestead Exemptions in Bankruptcy After the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)," Pages 31 and 36. Accessed April 17, 2020.
- In some states, the exemption does not apply to school taxes. In such an instance, calculate the school taxes based on the full value of your property. Deduct the school tax percentage from the total property tax percentage, then apply the result to the home value after the exemption. For example, if your property tax rate is 6 percent and the school tax rate is 1 percent, calculate the school tax by multiplying $125,000 times 0.01 to get $1,250. Deduct 1 percent from 6 percent to arrive at 5 percent. then multiply $100,000 times 0.05 to get $5,000. Add $1,250 to $5,000 to arrive at the total property tax amount for the year.
A graduate of New York University, Jane Meggitt's work has appeared in dozens of publications, including Sapling, Zack's, Financial Advisor, nj.com, LegalZoom and The Nest.