Property Tax Exemptions: What You Need To Know
Skyrocketing property taxes have become commonplace throughout the country, especially in the past few years. While there are multiple ways to position your property to get a property tax reduction, one of the most effective ways to receive larger reductions is through property tax exemptions.
There are a few different exemptions that can reduce or even eliminate your tax liability depending on your personal circumstances. The most common property tax exemptions include homestead, senior, disability, and veteran exemptions. This article will cover what each of these exemptions are, as well as who typically qualifies for them.
Note: Exemptions can differ from state to state and even county to county. Please reach out to a property tax expert for more insight into your specific county’s tax requirements.
Homestead or Primary Residence Exemption
The most common exemption for property owners is the homestead exemption. This exemption is granted for a property owner’s primary residence. To qualify for a homestead exemption the property must be your primary residence in the year you apply. Most states have some sort of tax break for owner occupied properties and they are often the biggest tax breaks homeowners can take advantage of. This exemption reduces the taxable value of your property either by a flat dollar amount or a percent reduction each year. In states like Texas, you can deduct up to $25,000 off your assessed value reducing your property taxes by over $600 a year. For homeowners living within city limits or towns with higher taxes, your savings from this exemption could be even higher. Primary residence exemptions can also cap the potential increase in your property taxes each year, for example in Texas your taxable value can’t go up more than 10% a year if you have an active homestead exemption on the property.
The senior exemption is generally offered to property owners who are age 65 and older. While the requirements for senior exemptions differ from county to county, typically these requirements include the property being the main residence of the property owner and that the property owner falls within a certain income status. For example, in King County Washington , to qualify for a senior property tax exemption an individual must be age 61 or older and have an income below $58,423
Many states allow disabled individuals to qualify for property tax exemptions. This exemption is open to disabled individuals who meet the definition of disabled for the purpose of receiving disability benefits under the Federal Old-Age, Survivors and Disability Insurance Act. The disabled persons exemption applies only to the individual's primary place of residence. In states like Florida for example, disability exemptions range from $500 to complete exemption of all ad valorem taxes depending on extent of disability as certified by licensed medical professionals.
The veteran exemption for real estate is a federal law that provides exemptions to certain disabled veterans and spouses of deceased veterans from paying property taxes on their home if the property is their primary residence. This exemption is intended to help increase homeownership among disabled veterans and the families of deceased veterans. Every state offers some form of property tax exemption for veterans with varying percentages of VA certified disability. However, California, Iowa, and Wyoming also offer property tax exemptions to veterans who are not disabled.
How To Claim An Exemption
In most jurisdictions, property tax exemptions are filed through the county assessor’s office. There are a few ways you can apply for exemptions depending on your county. While most counties will accept mailed in applications for exemptions, some counties allow you to complete the entire application process electronically through their website. The qualifications and application process can vary from county to county so it’s a good idea to visit your county assessor’s website for specific information on how to apply for an exemption in your area. These exemptions require specific supporting documentation, so it is important to have the required information on hand before you start the exemption application process.
Finding Even More Savings
It is often possible to save money beyond what an exemption can offer by appealing your property taxes. This is especially important in the years following up to the qualification threshold for certain time-dependent exemptions such as homestead and senior exemption. This is because it helps keep your property’s taxable value as low as possible so that when you do qualify for an exemption it’ll already be based on your previously established low taxable value. Check out our tax savings estimator to see how much you could save on your property taxes.
Appealing your property taxes yearly is another great way to proactively combat rising property taxes. With an average property tax reduction of 12% and a 89% success rate on appeals, Ownwell can handle every aspect of your appeal for you.
Signing up takes less than five minutes, and with our savings-or-free guarantee a dedicated property tax expert will start building an appeal that maximizes your savings potential with no upfront cost to you. Upon a successful appeal, we only charge a 25% contingency fee based on the final reduction you receive.