Widespread Property Tax Exemptions | Bankrate

Proudly owning a house can include loads of bills. Past your month-to-month mortgage funds and the price of common maintenance, you’ll even be liable for paying property taxes. Property tax exemptions is usually a helpful approach of lowering what you owe — in the event you qualify. Right here, we’ll discover a number of the most typical property tax exemptions, and who qualifies for them.

Key takeaways

• Property tax exemptions can remove, or enormously scale back, the quantity of property taxes a home-owner should pay
• Exemptions for major residence homeowners, senior residents, navy members and extra are widespread in lots of states
• Eligibility {qualifications} differ broadly from place to position, so test rigorously and do your analysis

What’s a property tax exemption?

Property taxes are usually based mostly on the assessed worth of your own home and differ by state, county or municipality. They’ll make a big dent in your price range, however acquiring a property tax exemption — which means you’re legally excused from paying — can scale back and even remove the quantity of tax a home-owner is answerable for.

Some exemptions could also be based mostly on the home-owner’s life circumstances, resembling revenue stage, age or navy service. Others rely on the property itself, resembling whether or not it serves as a major residence or is used for agricultural functions. Who’s eligible for these exemptions can rely on quite a lot of components, and varies by locale.

Property tax exemptions vs. deductions

Many individuals confuse the 2, and even use the phrases interchangeably, however there’s a essential distinction between a property tax exemption and a property tax deduction. A deduction merely lowers or decreases the quantity of tax you’re answerable for when tax funds are due. An exemption, nevertheless, means you’re actually exempt from paying — it eliminates the necessity to pay property taxes altogether. You’re legally excused from paying that tax.

Widespread property tax exemptions

Listed below are a number of the most typical property tax exemption situations. Remember that eligibility guidelines could be difficult, so in the event you assume you qualify for one, remember to test with a tax skilled and/or native authorities authorities, resembling your state or county division of taxation.

Homestead exemptions

• Who qualifies: primary-residence householders

Some states supply a property tax exemption on a house if it serves as its proprietor’s major residence. (This isn’t out there for trip properties or funding properties.) A homestead exemption could or will not be capped at a certain quantity, relying on the worth of the house. And it may possibly generally take a number of years for this exemption to kick in, so you might have to pay property taxes on your own home at first, till you qualify.

Senior citizen exemptions

• Who qualifies: householders over the age of 65

In lots of states, you’re eligible for a property tax exemption as a senior citizen in the event you’re over 65, or will flip 65 by December 31 of that tax 12 months. Age necessities could differ by state, and a few states additionally require that your revenue be under a sure stage.

Navy exemptions

• Who qualifies: navy service members and veterans

You might be eligible for a property tax exemption in the event you’re a U.S. navy veteran, or an energetic service member. Some states restrict navy exemptions to disabled veterans or these with a decrease revenue, so remember to test the foundations in your space rigorously.

Incapacity exemptions

• Who qualifies: folks with sure sort of disabilities

In case you are residing with a incapacity, it’s possible you’ll qualify for a property tax exemption or discount. Some states solely supply this exemption to low-income people, or to these with a selected incapacity ranking.

First-time homebuyer exemptions

• Who qualifies: new householders

First-time homebuyers could qualify for a full or partial exemption on their property taxes. Sometimes, this exemption is barely supplied for the primary few years of homeownership. Some states solely supply this exemption if the house was bought from a authorities company or via a authorities program.

Low-income exemptions

• Who qualifies: low-income or financially deprived people

Some states supply an exemption for people with low revenue or for these receiving the College Tax Reduction (STAR) program. You might want to use for this annually and supply proof of revenue to qualify.

Surviving partner exemptions

• Who qualifies: widows or widowers of certified exemptees

Property tax exemptions may be out there to surviving spouses of those that certified. For instance, if the property proprietor was a navy veteran who handed away, the exemption eligibility could move to the surviving partner.

Easy methods to apply for a property tax exemption

Property tax exemptions can scale back or remove the quantity of property tax you’re answerable for. However the {qualifications} and utility necessities differ from place to position, and every property and state of affairs is completely different, so householders should be ready to do their homework.

If you happen to assume you qualify for a number of exemptions, begin with on-line analysis: This will embrace the web sites of your native division of taxation, division of finance, veteran’s affairs company, comptroller’s workplace or tax assessor’s workplace. It’s additionally sensible to seek the advice of with a tax skilled within the space. When making use of, pay shut consideration to deadlines to make certain you get your purposes in on time.

Backside line

Property tax exemptions can enormously scale back and even remove your property tax legal responsibility. The most typical sorts embrace homestead exemptions, navy exemptions and exemptions for senior residents or these with disabilities. Eligibility and exemption quantities differ broadly by location, so some analysis is required to find out which you may qualify for and the way to apply.