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Homestead Exemptions and Forms

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Homestead Exemption - How to Protect Your Homestead

If you're wondering what is homestead exemption or how to homestead your home, the article below will provide answers to your questions.

Homestead exemption is the diminution of market value of a home for the purpose of computing property tax. Homeowners who use their property as a residence can claim homestead exemption for that property. Homestead exemptions eliminate part of the market value of a home from taxation, so that taxes will be minimized.

Homestead exemption laws not only provide exemption to homeowners from property taxes but also aim to protect home owners from the compulsory sale of their homes. A homestead exemption law aims to:

  • exempt the homestead of a debtor from forced sale or attachment of the property to repay the general debts of the debtor
  • protect a surviving spouse from foreclosure and other events arising from the death of spouse
  • protect resident home owners from creditors and tax collectors
  • provide exemption to homesteads from property taxes
  • permit a tax-exempt homeowner to raise his/her opinion on property tax matters

Most homestead statutes provide for an assessed value to determine property tax protection. Statutes apply a progressive tax to guarantee that homes with lesser assessed value benefit the most from the exemption.

Homestead exemptions are governed by state laws and laws differ from state to state. In a majority of states, a homestead exemption can be claimed only for the assessed value of the principal residence of an individual homeowner. It cannot be claimed for any residence other than the principal residence, even if the other residence is outside the jurisdiction of the principal residence. In many states, a home owner has to file a homestead exemption application form with the concerned authority for claiming homeowner tax exemption, while some states provide automatic homestead deduction. In some states, the homestead exemption may be performed by default if a homestead property is facing foreclosure.

The degree of protection provided by different jurisdictions varies. Some jurisdictions limit homestead tax deduction up to a specific value of the property, while other jurisdictions limit protection up to certain acreage. Some states provide special protection to aged or legally disabled persons. Under a majority of states, for claiming homestead exemptions, land includes fixtures like timber, landscaping, buildings and any improvement made to it.

An application for residential homestead exemption has to be filed with the office of the county appraiser where the property is situated. Under some jurisdictions, county appraisers are known as property appraisers or tax appraisers. A homestead exemption application should be filed within one year after the taxes on the homestead are due. When the application is filed, the property appraiser estimates the accurate market value of the homestead property. Once a homestead exemption is received, it is permanent and the applicant need not reapply.

Homestead Exemption FAQs

What is homestead under homestead exemption laws?

A homestead is an independent structure, mobile home, or a condominium that is located either on owned land or leased land. A homestead can include up to 20 acres in some areas and must be used for residential purposes. However, it is mandatory that the resident must own it.

What is homestead exemption?

Homestead exemption is a method of lowering taxes by reducing the market value of one's home in the process of computing property tax. The primary benefit of homestead exemption reflects on your property tax. Once you qualify for homestead exemption on your principal residence, a part of the value of the property is removed from taxation. This in effect lowers your property taxes. For example, if you qualify for a $20000 exemption on your home, the assessed value of which is $45,000, you will be required to pay taxes on the home only for $25,000.

Do all homes come under the purview of homestead exemptions?

No, all homes do not qualify for homestead exemption. For a house to qualify for homestead deduction, it must be the principal residence of the homeowner on the first day of the financial year. The owner should also not be a corporation or a business entity, but an individual.

Can you tell me how to homestead my residence?

In order to exempt your homestead, you have to file an application for residential homestead exemption and claim homeowner tax exemption. The exemption application must be filed before the county appraiser (also known as property appraisers/tax appraisers) during the period from January 1st through April 30th of the relevant tax year. In case you are late, you have time until one year from the date your taxes became delinquent. In case you become disabled or turn 65 years old in the course of the tax year, you will have to apply for such an exemption, ie; 65 or older or disabled exemption, within one year of the date of qualification. Once you receive an exemption, reapplication is not required as long as the property appraiser does not send you a new application. If the property appraiser sends you a new application, you must file it. If you happen to move out of the home or in the event your qualification ends, please make sure to inform the appraisal district. While some states require that a home owner should file a homestead exemption application form, some states provide for automatic homestead tax deduction.

Will I be eligible to exempt my home from property tax if I move out of the house temporarily?

Yes, you will be eligible to receive homestead exemption if you move out only temporarily. However, make sure of the following:

  • You should not set up another principal residence.
  • You should have the intention to return home.
  • You should not be away beyond two years.

The prohibition regarding not staying away beyond two years does not apply provided:

  1. 1. You work for the military service

  2. or

  3. 2. You live in an establishment that provides health, infirmity, or aging services

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