Property taxes can be one of the largest ongoing expenses for homeowners, but fortunately, the Keystone State offers a valuable program to help lower your annual bill.
If you own and occupy your home as your primary residence, you may be eligible for the Pennsylvania homestead exemption. With Pennsylvania's median effective property tax rate sitting at 2.75%, significantly higher than the national median of 1.02%, finding ways to save is crucial.
Homeowners can take advantage of the general homestead exemption and other local ones to lower the assessed value of their home and save hundreds of dollars each year.
What Is the Pennsylvania Homestead Tax Exemption?
Enacted under the Taxpayer Relief Act of 2006, the Pennsylvania homestead and farmstead tax exemption is a property tax reduction program funded primarily by state gaming revenues.
Instead of sending you a rebate check in the mail, the program works by reducing the assessed value of your property before your school property taxes are calculated.
Because school taxes almost always make up the largest portion of a homeowner's total property tax bill, reducing the taxable value of your home can lead to significant savings.
However, the exclusions differ by county and city.
In Allegheny County, the exclusion results in an $18,000 reduction in assessed value for county real property taxes.
In Philadelphia, for 2026, the exemption reduces the taxable portion of a property's assessed value by $100,000, saving most homeowners about $1,399.
Who Qualifies for a Homestead Exemption in Pennsylvania?
To qualify for a homestead exemption in Pennsylvania, the property must be your primary residence. The median Pennsylvania tax bill is $3,050, making this relief highly sought after for owner-occupied households across the state.
Reviewing the Eligibility Rules
Primary Residence Only: You can only claim one primary residence at a time, which is generally the address where you are registered to vote and hold your driver's license.
Ineligible Properties:
Rental units
Vacation homes
Camps
Commercial real estate
Mixed-Use Exceptions: If you have a mixed-use property (like a storefront with an apartment above it), you may still be eligible for an exclusion based on the portion of the property used solely as your residence.
Farmstead Exclusion: If you live on a working farm, you may qualify for a Farmstead Exclusion.
Qualification: You must have at least 10 contiguous acres used for agricultural purposes.
How to Apply Using the Pennsylvania Homestead Exemption Form
Filing for this tax relief is straightforward, but strict deadlines apply.
To receive the exclusion, you must submit a Pennsylvania homestead exemption form to your local county assessment office. You can contact your local county assessment office here; use position 48 in the Official Code selection.
How to File a Homestead Exemption in Pennsylvania
Find the Form: You can usually download the application directly from your county's Board of Assessment website or pick up a paper copy in person.
School districts are also required to mail applications to eligible, non-approved property owners 60 days prior to the deadline.
Meet Statutory Deadlines: For most of the state, the deadline to file your application is March 1st of the year for which you are seeking the exemption.
Philadelphia’s Unique Deadline: If you live in Philadelphia, the final application deadline is December 1st each year, though applying by October 1st is strongly recommended to ensure the approval is reflected on your upcoming bill.
Automatic Renewal: Once approved by your county assessor, your exemption remains active automatically unless your deed changes or you move.
Property Tax Exemption vs. Bankruptcy Protection: What’s the Difference?
It’s very common for homeowners to confuse the state property tax homestead exemption with a homestead exemption used in bankruptcy court. They are two entirely separate concepts.
The homestead tax exemption is strictly a tax-relief program. It reduces your assessed property value to lower your school taxes, but it offers zero protection if you file for bankruptcy or have creditors coming after your assets.
Pennsylvania does not have a state-level bankruptcy homestead exemption. Therefore, if you file for Chapter 7 bankruptcy in PA, you must use the federal bankruptcy homestead exemption. As of April 2025, the federal exemption allows individuals to protect up to $31,575 of equity in their primary residence (or $63,150 for married couples filing jointly).
Summary of Differences
Feature | Property Tax Exclusion | Bankruptcy Exemption |
|---|---|---|
Purpose | Lowers yearly school taxes | Protects the home from creditors |
Legal Basis | Philadelphia Code / PA Act 1. | Federal Law 11 U.S.C. § 522(d)(1). |
Amount | Varies by county/district | $31,575 (Individual) / $63,150 (Married). |
Limit | Only 1 primary residence | Only 1 primary residence |
How the Federal Homestead Bankruptcy Exemption Works
How it works: This exemption shields a specific dollar amount of your home's "equity" (the home's fair market value minus any mortgages or liens).
Protection Limits: As of 2025, an individual can protect up to $31,575 in home equity. If a married couple co-owns the home and files jointly, they can double this to $63,150.
The Consequences: If your home equity exceeds these limits, a bankruptcy trustee could potentially sell your home to pay creditors, though you would be entitled to receive your exempted portion (e.g., $31,575) from the sale proceeds to help you start over.
Can They Be Combined?
Yes, but they operate independently.
You can use the Pennsylvania property tax exemption to lower your annual tax bill and simultaneously claim the federal bankruptcy homestead exemption to protect your home's equity from bankruptcy liquidation.
Using one does not prevent you from using the other.
Maximizing Your Property Tax Savings With Ownwell
Applying for the Pennsylvania homestead exemption is an excellent first step in managing your homeownership costs by lowering your assessed value.
At Ownwell, we make saving on property taxes effortless. We assist homeowners with filing their property tax exemptions across the entire state of Pennsylvania (with the exception of Westmoreland County), and do not support the farmstead exemption.
Moreover, if your home's initial assessed value is inaccurate or higher than similar homes in your neighborhood, you could still be overpaying on your property taxes, giving cause for a property tax appeal.
Our local experts can file a property tax appeal on your behalf. We currently handle property tax appeals in Lancaster, Allegheny, and Philadelphia counties.
Your Neighbors Might Be Paying Less...
We gather local market data, build a robust case, and handle the complex paperwork. Best of all, you only pay if we successfully secure savings for you.
Don't leave money on the table. Whether you need help applying for your eligible exemptions or you want to fight an unfair tax assessment, our team is here to help you reduce your costs.
