How to Determine Qualification for a Homestead Tax Exemption

by Jane Meggitt ; Updated July 27, 2017

If you live in a state that offers a homestead tax exemption, find out if you qualify by visiting your state's Department of Revenue or Department of the Treasury website. While many -- but not all -- states have some form of exemption, who is eligible depends on the law in the individual state. Of course, the first step is verifying that your state indeed has such a law. That information should also be available on the Department of Revenue website.

Tips

  • You may also contact your county tax assessor for more information about your eligibility for the homestead exemption.

Homestead Exemptions

Homestead exemptions serve two general purposes. They shelter the homestead from a certain amount of property or school tax by reducing the dwelling's taxable value. The homestead exemption also often shields a state-specific amount of equity from judgment creditors, if the homeowner loses a lawsuit. Some states, such as Massachusetts, offer homestead protection from certain creditors, but no homestead tax exemptions per se. In New York, the homestead exemption isn't statewide: It varies by municipality.

Eligible Dwellings

In most states, eligible dwellings for homestead tax exemption include:

  • Single-family homes
  • Condominiums
  • Farm houses
  • Manufactured or mobile homes.

The amount of land considered part of the homestead for exemption purposes depends on state law. In Texas, land up to 20 acres surrounding the homestead may qualify -- in other states, it's usually considerably less acreage.

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Typical Requirements

Virtually all homestead exemption regulations stipulate that the property must be your primary residence and you or your spouse must own it. Properties that don't qualify for homestead exemptions include:

  • Vacation homes
  • Second homes
  • Rental homes
  • Homes under construction
  • Commercial properties.

You can only have one primary residence, even if you own property and spend relatively equal amounts of time in two or more states.

Age and Disability Exemptions

In some states, only certain homeowners qualify for homestead exemptions. For example, in Ohio, only senior citizens with an income below a certain threshold and totally and permanently disabled residents are eligible.

Documentary Evidence

Expect your state to require written documentation that your homestead is indeed your primary residence. Such documentation may include:

  • Driver's license
  • Utility bills
  • Voter registration card
  • Deed
  • Income tax records
  • Credit card bills

Of course, all of these documents must cite your homestead property as your address. In many states, you must reside in your home on January 1 to receive an exemption for that year.

Don't Qualify, Don't Apply

If you don't qualify for your state's homestead exemption, don't attempt to apply. That's fraud, and the penalties can be serious. For example, in Florida, anyone caught cheating on their homestead exemption faces:

  • a lien on the property
  • 50 percent payment of the unpaid taxes for each applicable year
  • back taxes due for as much as 10 years
  • 15 percent annual interest rate on taxes.

About the Author

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.

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