[Homestead Exemption](/blog/homestead-exemption-guide): How to Apply and Save Thousands on Property Taxes

The homestead exemption is the most universally available — and most frequently missed — property tax benefit for homeowners. It's not complicated, it's not means-tested in most states, and it's not something you have to earn. You simply have to apply. Yet millions of eligible homeowners never do, paying hundreds or thousands more in property taxes than required every single year.

This guide explains what the homestead exemption is, which states offer it, how much it saves, and exactly how to apply — including the critical deadlines most people miss.

What Is the Homestead Exemption?

The homestead exemption reduces the taxable assessed value of your primary residence, which directly lowers your property tax bill. It's offered by most states and many municipalities as a policy tool to encourage homeownership, stabilize neighborhoods, and make owning a home more affordable.

How it works:

Taxable Value = Assessed Value − Homestead Exemption Amount
Annual Tax Savings = Homestead Exemption Amount × Local Tax Rate

Example:

• Home assessed value: $350,000
• State homestead exemption: $50,000
• Taxable value: $300,000
• Local tax rate: 1.5%
• Annual tax savings: $50,000 × 1.5% = $750/year

Over 20 years of homeownership, that's $15,000 in savings — for paperwork that takes 15 minutes to complete.

The Two Types of Homestead Exemptions

Homestead exemptions come in two basic forms, and many states offer both:

1. Fixed Dollar Exemption

A set dollar amount is subtracted from your assessed value. Common amounts range from $5,000 to $75,000+.

Examples:

• Texas: Up to $100,000 exemption (with school district taxes)
• Florida: $25,000 base + additional $25,000 for non-school levies = up to $50,000
• Georgia: $2,000 on the state portion (counties often offer additional)
• Illinois: $6,000 (Homeowner Exemption)

2. Percentage Exemption

A percentage of your home's value is exempted from taxation.

Examples:

• Oklahoma: 5% of fair cash value
• Louisiana: First $75,000 of market value exempt (up to specified cap)

Some states use a combination of both approaches.

State-by-State Homestead Exemption Overview

Here's a snapshot of homestead exemptions in key states. Always verify current amounts with your county assessor, as these change regularly:

States with no homestead exemption: Some states (e.g., New Jersey, Michigan) don't offer a traditional homestead exemption but have alternative programs that serve similar purposes.

Who Qualifies?

Basic qualification requirements (which vary by state) typically include:

1. Primary Residence:
The property must be your principal place of residence as of January 1 of the tax year (in most states). You cannot claim the exemption on vacation homes, investment properties, or rental properties.

2. Ownership:
You must own the property — or have a qualifying ownership interest (e.g., a beneficiary of a trust that owns the home).

3. Residency:
Most states require you to be a legal resident of that state. Some states require US citizenship or legal permanent residency.

4. Application:
Almost universally, you must apply — the exemption is not automatic. This is the step most homeowners miss.

Additional Exemptions Beyond the Basic Homestead

Many states layer additional exemptions on top of the base homestead for qualifying homeowners:

Senior Citizen Exemptions

Homeowners over age 65 often qualify for enhanced exemptions:

• Florida: Additional $25,000 exemption for seniors with income under specified thresholds
• Texas: An additional $10,000 school tax exemption for homeowners 65+
• Many counties: Additional local exemptions for seniors

Disability Exemptions

Homeowners with qualifying disabilities (often documented through Social Security Disability status) can access:

• Additional assessed value reduction
• Property tax freezes (assessment frozen at current level)
• In some cases, full property tax exemption

Veteran and Active Military Exemptions

Many states offer substantial additional exemptions for veterans, particularly disabled veterans:

• Texas: 100% disabled veterans pay no property tax
• Florida: Additional exemptions for combat veterans and surviving spouses
• Most states: Some form of veteran-specific property tax benefit

Agricultural/Rural Property

If part of your property qualifies as agricultural land, additional exemptions may apply separately from the homestead exemption.

How to Apply: The Step-by-Step Process

Step 1: Find Your County Assessor's Office

Property taxes are administered at the county level. Find your county assessor's website (a simple web search for "[Your County] County Assessor" usually finds it). Most counties now offer online application.

Step 2: Determine the Deadline

This is critical. Most states have a hard deadline — often January 1 through March 1 or April 1 of the tax year you want the exemption to apply. Miss the deadline and you wait another year.

Common deadline types:

• January 1 residency date + filing deadline 30–90 days later
• Calendar year filing: Application by March 1 for current tax year
• Rolling deadlines: Some states allow application any time, effective next tax year

Search specifically for your state's homestead exemption deadline — don't assume.

Step 3: Gather Required Documents

Typical [documentation](/blog/heloc-documentation-requirements) requirements:

• Proof of ownership: Property deed, mortgage statement, or tax bill
• Proof of primary residence: Driver's license, voter registration, utility bill, or bank statement showing property address
• Government-issued ID
• For additional exemptions (senior, disability, veteran): Age verification, disability documentation, DD-214 military discharge papers

Step 4: Complete the Application

Applications are typically available:

• Online: Most county assessors now have online portals
• In person: Visit the assessor's office
• By mail: Download the form, complete it, and mail it in

The application is usually 1–2 pages. Common fields:

• Property address and parcel number
• Owner name(s) as shown on deed
• Date of purchase/ownership
• Certification that this is your primary residence
• Signature and date

Step 5: Submit and Confirm

Submit the application before the deadline using your preferred method. If submitting by mail, use certified mail. Keep a copy of everything you submit.

After processing (typically 4–8 weeks), you should receive confirmation. Check your county assessor's online record to verify the exemption appears on your property file.

Step 6: Verify It Appears on Your Tax Bill

When you receive your next property tax bill, verify the exemption has been applied. If you don't see the expected reduction, contact the assessor's office immediately.

The "Set It and Forget It" Advantage

In most states, once approved, the homestead exemption renews automatically each year as long as the property remains your primary residence. You don't need to reapply annually.

Exceptions where you may need to re-certify:

• Some counties do periodic verification audits
• If you move to a new primary residence, you must apply for the new property
• If your situation changes (you rent out your home and it's no longer your primary residence), you're legally obligated to notify the assessor

What Happens If You Move?

The homestead exemption is property-specific. When you sell your home:

• Your exemption terminates
• The buyer must apply for their own exemption on the property
• You must apply for the exemption on your new primary residence

Critical: Don't let your old exemption linger on a property you've sold. This can be considered homestead fraud in some states.

The Portability Feature (Florida Highlight)

Florida has a particularly valuable feature called Save Our Homes portability. Homeowners in Florida benefit from a SOH cap that limits assessment increases to 3% annually while the exemption is in place. When moving to a new Florida home, homeowners can "port" up to $500,000 of their accumulated savings to the new property.

This portability feature is worth tens of thousands of dollars for long-term Florida homeowners and is a significant factor in homeownership decisions in the state.

Other Property Tax Benefits That Complement the Homestead Exemption

The homestead exemption works alongside other potential savings:

Property tax freeze programs: Some states freeze the assessed value for qualifying seniors, meaning property taxes won't rise even if home values increase.

Circuit breaker programs: Income-limited homeowners may qualify for property tax credits or rebates that effectively "cap" taxes as a percentage of household income.

Property tax deferral: Qualifying seniors or disabled homeowners in some states can defer property taxes until the home is sold.

If you're already maximizing your homestead exemption, explore the full landscape of homeowner tax benefits available at the state and federal level.

The Financial Connection to [Home Equity](/blog/equity-vs-appreciation)

Your property tax obligations affect your home's net carrying cost and therefore your effective return on equity. For investment property owners, property taxes directly affect NOI and DSCR ratios — which is why [reducing property taxes is a key strategy for [DSCR loan](/blog/dscr-loan-guide) borrowers](/blog/dscr-loan-cash-flow-optimization) seeking to improve their loan qualification metrics.

For primary homeowners, reducing your annual property tax bill is one of the highest-return actions you can take: it's permanent (repeating savings every year), requires minimal effort, and improves your monthly cash flow immediately.

Common Mistakes to Avoid

Assuming the exemption is automatic: It's almost never automatic. You must apply.

Missing the deadline: Usually the most expensive mistake. Set a calendar reminder every January to verify your exemption is in place.

Not checking for additional exemptions: The basic homestead is just the start. Check for senior, disability, and veteran-specific additions.

Keeping the exemption on a sold property: This is fraud. Notify the assessor when you move.

Not appealing a denial: If denied, ask for the specific reason and appeal with documentation if you believe you qualify.

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