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.
Homestead Exemptions Lower Your Tax
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.
Homestead Exemptions Vary
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.
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Calculating Property Taxes
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 has one of the lowest property tax rates 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.
Contact Your Property Tax Assessor
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.
- 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