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The Different Types of Property Tax Exemptions and Who Qualifies

Property tax exemptions aren’t typically thought of as being especially beneficial to average homeowners, and many don’t even know that they exist in the first place. However, there are plenty of different property tax exemptions out there that can save homeowners hundreds, or even thousands, of dollars each year! Read on to learn about some of the different types of property tax exemptions and who qualifies for them.

​Property Tax Exemption Basics

Nonprofit, religious, and government properties are not subject to property taxes. Seniors, veterans, and School Tax Relief (STAR) eligible individuals may also apply for exemptions, which require an application to be completed. It all depends on your income, age, where you live, what the rules are where you live, and a few other variables. It’s important to consult with a tax professional or real estate lawyer to figure out whether you qualify for property tax exemptions.

What Is A Homestead Exemption?

A homestead exemption is a reduction in the property taxes owed on a homeowner’s primary residence. The exemption can apply to all taxes, or just to specific taxes, such as school district taxes. To qualify for a homestead exemption, a homeowner must reside on the property as their primary residence as of January 1st of the tax year.

There are two types of homestead exemptions: general homestead exemptions and senior citizen homestead exemptions. General homestead exemptions are available to all homeowners who meet the residency requirements, while senior citizen homestead exemptions are available to homeowners who are 65 years of age or older.

Homestead exemptions can save a homeowner hundreds or even thousands of dollars each year in property taxes. On a state-by-state basis, certain policies can help shield up to $5,000 to $500,000 of the value of your home. Some states offer a higher exemption for joint property taxes and married couples. This means you could save even more on property taxes.

What Is An Age Exemption?

States often exempt residents who reach a certain age from paying taxes. Some areas may use their Social Security numbers to determine eligibility. Senior exemption details vary by state, and there are sometimes income and residency requirements. In other states, the tax is deferred until the property is sold.

You’ll need to read the fine print, but it’s still worthwhile to look into the tax laws in your area.

Veteran Exemption & Disability Exemptions

Soldiers and veterans may be able to claim exemptions on various taxes, including property taxes. States vary, but any programs concerning veterans exemptions are worth checking out.

You may be able to exempt a certain amount of property value or even be exempt from property taxes altogether. Qualifying unremarried spouses may also qualify for tax benefits. Veteran property tax exemptions could save you thousands of dollars.

Furthermore, those who are disabled are eligible for disability exemptions. In the event of the worst case scenario, there is a large variance in individual state policies. Know that you may have to supply or sign an affidavit declaring your disability.

Even if you don’t qualify for property tax relief, there are still many other deductions you may be eligible for that are available to the disabled. For example, home modifications to provide access by way of ramps or in making it easier to get around inside the house are allowable medical expenses that can lower your tax liability.

Can I Claim Multiple Property Tax Exemptions?

Depending on where you live, you might qualify for more than one property tax exemption. States differ in what exemptions they allow, but in many states, you might qualify for more than one exemption.

You can search for your state’s income exemptions on your state’s revenue website, but if you’re curious, you should also stop by your county’s tax collector’s office for more information. To find the answers you need, either call the tax collector’s office or discuss your options with a tax professional.

Property Tax Exemptions Aren’t The Same As Deductions

If you have a property tax exemption, you will not have to pay that tax when you file your taxes. However, if you have a deduction, the deduction simply reduces the income that you have to pay tax on.

In contrast to property tax deductions, property tax exemptions allow eligible parties to avoid large amounts of property taxes outright.

Governments give tax exemptions as a way to excuse a percentage of the homeowner’s tax. Smart homeowners should make use of these incentives.

You still pay the tax, but you limit the amount of income or property value you have to pay the tax on.

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