A Complete Guide to Understanding the Homestead Exemption

Nothing is as satisfying as knowing the beautiful space you call yours isn’t just a roof over your head—it’s an investment that grows your wealth and stability. But with great property ownership comes great property tax bills. Thankfully, the homestead tax exemption exists to take some of the sting out of those taxes. Read about the homestead exemption and how it can save you serious cash.

What Is a Homestead Exemption?

Think of the homestead tax exemption as a friendly little tax break for property owners. It is a legal provision in taxing codes that reduces the taxable value of your primary residence. By extension, the property taxes you owe the local government are calculated on a lower value than your home’s actual market value.

For example, if your home is worth $200,000 and your state offers a $50,000 homestead exemption, you’ll only be taxed on $150,000 instead of the full value. Pretty sweet, right? The ultimate goal is to make homeownership a little more affordable.

One important thing to note is that the rules for homestead exemptions vary by state—what you qualify for in Texas might differ from what’s available in New York.

Additionally, some state regulations define a homestead exemption as the amount exempt from creditor claims. When researching the issue, look for adjustments to ad valorem taxes–another word for property tax.

Benefits of Homestead Exemptions on Property Taxes

Why bother applying for a residence homestead tax exemption? Because the benefits go far beyond just saving a few dollars! Here’s why they’re invaluable for homeowners:

• Lower Property Taxes: One of the most prominent and immediate benefits is reducing your annual property tax bill.
• Creditor Protection: Some states offer additional laws tied to the homestead exemption that protect a portion of your home’s equity from creditors. This could be a lifesaver in case of financial hardship.
• Surviving Spouse Protections: Certain states extend exemptions to the surviving spouse’s residence homestead, providing some financial relief during a challenging time.

How Homestead Exemptions Affect Property Taxes

Homestead exemptions can reduce the overall property tax bill by exempting a portion of the property’s value from taxation. The total exemption amount can lead to a substantial reduction in property taxes.

In general, homestead exemptions reduce the assessed value of the property, reducing the property tax bill. For example, if a property is valued at $200,000 and the homestead exemption is $50,000, the taxable value would be $150,000. This reduction in taxable value can result in a lower property tax bill.

Homestead exemptions may change the way property taxes are calculated. In some states, the exemption is applied to the property’s assessed value. Others apply it to the property’s appraised value. Both approaches have the same goal: lower the tax burden on homeowners.

At the same time, the local county needs to fund its government operations. Reducing ad valorem taxes is a balancing act between generating revenue and helping locals. That’s why some states have blanket homestead tax exemptions. Others limit it to permanent residences owned by at-risk groups, like veterans, disabled persons, or those impacted by a natural disaster.

How to Apply for a Homestead Exemption

Applying for your property tax exemption, such as the homestead exemption, isn’t as tedious as you might think. Here’s a simple step-by-step guide:

Verify Eligibility:

• Ensure the property is listed as your primary residence.
• Confirm you meet additional requirements, such as state residency. Some states require you to be present a specific number of days or months of the year to claim residency.

Gather Essential Documents:

• Proof of identity (driver’s license, passport).
• Proof of ownership (property deed, closing statement).
• Any supporting documents for special exemptions (e.g., proof of age, disability benefits, or veteran status).

Submit Your Application:

• Contact your local tax assessor’s office to file the application.
• Double-check the deadlines. Missing them could mean waiting an entire year to qualify.

Avoid Common Mistakes:

• Make sure all required sections of the application are complete and legible.
• Update your address if you’ve recently moved.

Who Qualifies for Homestead Exemptions on Primary Residence?

Always check with your local tax office for state-specific details. Most homeowners can qualify for a homestead exemption if they use the property as their principal residence. However, states often write narrow exemptions available specifically for:

• Seniors (typically 65+)
• Veterans, disabled veterans, or a service-connected disability
• Disabled persons, such as the blind or paraplegic
• Surviving spouses of first responders killed in the line of duty or military personnel

While not as common, there may also be special exemptions for:

• Active duty armed services
• Natural disasters
• Low-income earners or financial hardship

These special exemptions lead to enhanced tax savings, so it’s worth checking if you qualify for any additional benefits.

Homestead Tax Exemptions by State

Every state has its own approach to property tax homestead exemptions. Some offer dollar-amount exemptions, while others calculate exemptions as a percentage of a home’s assessed value.

Please note that general residence homestead exemption laws vary across the U.S. and do change. Some states define homestead exemptions as laws protecting your property values in the event of bankruptcy or foreclosure. Here, we are looking at property tax exemptions.

Some special property tax exemptions are assessed at the county level, affecting county taxes, school taxes, and municipal taxes. Consult your state’s specific guidelines or a local tax professional for the most accurate and up-to-date information.

For instance, in Texas, a $100,000 exemption for school districts can significantly lower a property’s taxable value, thus reducing the school taxes a homeowner pays. However, that amount doesn’t lower county taxes.

An overview of the homestead exemptions in the states, with the amount and if there are additional property tax exemptions for specific groups:

Alabama

• Exemption Amount: $15,000 single-filers/$30,000 married or joint owners
• Eligibility: Available to all homeowners; lot size limited to 160 acres.
• Special Exemptions: 65 and Over, Disability, Blindness

Alaska

• Exemption Amount: $54,000
• Eligibility: Available to all homeowners.
• Special Exemptions: Senior Citizen, Disabled Veteran, Military Service Surviving Spouse, Disaster

Arizona

• Exemption Amount: $150,000
• Eligibility: Available to all homeowners.
• Special Exemptions: Veterans, Disability, Surviving Spouse

Arkansas

• Exemption Amount: $500/year.
• Eligibility: Available to all homeowners.
• Special Exemptions: Senior Citizens, Disabled

California

• Exemption Amount: $7,000 statewide; other amounts depending on the county.
• Eligibility: Available to all homeowners.
• Special Exemptions: Senior Citizens, Disabled

Colorado

• Exemption Amount: 50% of the first $300,000 in property value + cumulative inflation from 2023 onward
• Eligibility: Qualifying seniors only
• Special Exemptions: Senior Citizens, Veterans

Connecticut

• Exemption Amount: $1,000-$10,000
• Eligibility: Qualifying special exemptions only
• Special Exemptions: Senior Citizens, Veterans, Disabled, Blind

Delaware

• Exemption Amount: Varies by county
• Eligibility: Qualifying persons only
• Special Exemptions: Senior Citizens, Disabled

Florida

• Exemption Amount: $50,000
• Eligibility: Available to all homeowners.
• Special Exemptions: Senior Citizens, Active Duty Military, Veterans, Surviving Spouses of First Responders

Georgia

• Exemption Amount: Standard exemption of $2,000
• Eligibility: Available to all homeowners; additional exemptions based on age and disability status.
• Special Exemptions: Seniors, Disabled individuals, Military and First Responder Surviving Spouses.

Hawaii

• Exemption Amount: $120,000
• Eligibility: All homeowners
• Special Exemptions: Seniors, Veterans, and Surviving Spouses.

Idaho

• Exemption Amount: 50% of home value and one acre of land or a maximum of $125,000
• Eligibility: Available to all homeowners
• Special Exemptions: Seniors, Disabled individuals, Military Surviving Spouses, Veterans

Illinois

• Exemption Amount: Based on the increase in the current year’s equalized assessed value (EAV), above the 1977 EAV, up to a maximum of $10,000 in Cook County, $8,000 in counties contiguous to Cook County, and $6,000 in all other counties.
• Eligibility: Available to all homeowners.
• Special Exemptions: Long-term occupancy, Veterans, Disabled, Homestead Improvement, Natural Disaster

Indiana

• Exemption Amount: Two types: Standard, the lesser of 60% of homestead value or $48,000, and Supplemental, after the standard deduction is applied
  • Property valued less than $600,000 a deduction of 35% after December 2025
  • Property valued above $600,000 a deduction of 25% after December 2025
• Eligibility: Available to all homeowners.
• Special Exemptions: Seniors, Veterans, Blind, Disabled, Surviving Spouse

Iowa

• Exemption Amount: $4,850
• Eligibility: Available to all homeowners.
• Special Exemptions: Seniors, Military, Disabled, Historic Property Renovation, Manufactured Housing

Kansas

• Exemption Amount: Rebated tax credit maximum of $700
• Eligibility: Qualifying homeowners.
• Special Exemptions: Seniors, Military, Disabled, Surviving Spouses of Active Duty Armed Forces

Kentucky

• Exemption Amount: $46,350 in 2023-2024
• Eligibility: Qualifying homeowners.
• Special Exemptions: Seniors, Disabled

Louisiana

• Exemption Amount: Up to $75,000
• Eligibility: All homeowners
• Special Exemptions: Seniors, Veterans

Maine

• Exemption Amount: Up to $25,000
• Eligibility: All homeowners after twelve months of residence
• Special Exemptions: Veterans, Blind

Maryland

• Exemption Amount: Property tax credit on any assessment increase above 10%
• Eligibility: All homeowners
• Special Exemptions: Seniors, Veterans, Surviving Spouses of Military, Blind

Massachusetts

• Exemption Amount: Varies
• Eligibility: Qualifying homeowners
• Special Exemptions: Seniors, Veterans, Surviving Spouses of Military and First Responders, Blind, Single Parents, Financial Hardship

Michigan

• Exemption Amount: Varies
• Eligibility: Qualifying homeowners
• Special Exemptions: Veterans, Surviving Spouses of Military and First Responders, Financial Hardship

Minnesota

• Exemption Amount: Varies by county
• Eligibility: All homeowners
• Special Exemptions: Veterans, Seniors, Disabled, Mold Damaged Homes, Disaster Relief

Mississippi

• Exemption Amount: Maximum $7,500 of assessed value
• Eligibility: All homeowners
• Special Exemptions: Seniors, Disabled

Missouri

• Exemption Amount: Maximum $1,100
• Eligibility: Qualifying homeowners
• Special Exemptions: Veterans, Financial Hardship

Montana

• Exemption Amount: Maximum $1,150 as tax credit
• Eligibility: Qualifying homeowners
• Special Exemptions: Seniors, Veterans, Disabled

Nebraska

• Exemption Amount: Varies
• Eligibility: Qualifying homeowners
• Special Exemptions: Seniors, Veterans, Disabled, Surviving Spouses of Veterans

Nevada

• Exemption Amount: Varies $3,400-$34,400
• Eligibility: Qualifying homeowners
• Special Exemptions: Seniors, Veterans, Disabled, Surviving Spouses of Veterans

New Hampshire

• Exemption Amount: Varies $50-$15,000
• Eligibility: Qualifying homeowners
• Special Exemptions: Seniors, Veterans, Disabled, Surviving Spouses of Veterans

New Jersey

• Exemption Amount: Varies $250 and up
• Eligibility: Qualifying homeowners
• Special Exemptions: Seniors, Veterans, Disabled, Surviving Spouses of Veterans, Active Military

New Mexico

• Exemption Amount: $2,000
• Eligibility: “Head of Household” homeowners
• Special Exemptions: Veterans, Disabled

New York

• Exemption Amount: Varies by county
• Eligibility: Available to all homeowners; amount varies by county.
• Special Exemptions: Veterans, Disabled, Seniors

North Carolina

• Exemption Amount: Up to $45,000
• Eligibility: Qualifying homeowners
• Special Exemptions: Veterans, Disabled, Seniors

North Dakota

• Exemption Amount: $500 as tax credit
• Eligibility: Available to all homeowners
• Special Exemptions: Veterans, Disabled, Seniors, Farm Residence

Ohio

• Exemption Amount: $26,200-$52,300; Adjusts annually for inflation
• Eligibility: Qualifying homeowners
• Special Exemptions: Veterans, Disabled, Seniors, Surviving Spouses of First Responders

Oklahoma

• Exemption Amount: $1,000
• Eligibility: All homeowners
• Special Exemptions: Disabled, Seniors, Financial Hardship

Oregon

• Exemption Amount: Varies
• Eligibility: Qualifying homeowners
• Special Exemptions: Veterans, Disabled, Seniors, Active-Duty Military, Surviving Spouses of First Responders

Pennsylvania

• Exemption Amount: Varies by county/school district
• Eligibility: Available to all homeowners
• Special Exemptions: Veterans, Disabled, Seniors

Rhode Island

• Exemption Amount: 5-14% assessed value
• Eligibility: All homeowners; amount depends on jurisdiction
• Special Exemptions: Veterans, Disabled, Seniors, Surviving Spouses of First Responders

South Carolina

• Exemption Amount: Exempts the first $50,000 of the fair market value of a primary residence from property taxes.
• Eligibility: Qualifying homeowners
• Special Exemptions: Seniors, Disabled, Blind

South Dakota

• Exemption Amount: Varies
• Eligibility: Qualifying homeowners
• Special Exemptions: Veterans, Disabled, Seniors

Tennessee

• Exemption Amount: Varies based on county
• Eligibility: Qualifying homeowners
• Special Exemptions: Veterans, Disabled, Seniors, Surviving Spouses of Veterans

Texas

• Exemption Amount: $100,000 or up to 20% of homestead value on school district property tax
• Eligibility: Available to all homeowners.
• Special Exemptions: Seniors, Disabled, Veterans, Surviving Spouses of First Responders Killed In Line of Duty

Utah

• Exemption Amount: 45% of fair market value and up to one acre of land
• Eligibility: Available to all homeowners.
• Special Exemptions: Seniors, Disabled, Blind, Veterans, Active Duty Military

Vermont

• Exemption Amount: $2,400 for municipal/$5,600 for state education property tax
• Eligibility: Available to all homeowners.
• Special Exemptions: Disabled Veterans

Virginia

• Exemption Amount: Varies by location and income
• Eligibility: Qualifying homeowners
• Special Exemptions: Veterans, Seniors, Surviving Spouses of Veterans

Washington

• Exemption Amount: $100,000 or up to 20% of homestead value on school district property tax
• Eligibility: Available to all homeowners.
• Special Exemptions: Seniors, Disabled, Surviving Spouses of Veterans, Financial Hardship

West Virginia

• Exemption Amount: $20,000
• Eligibility: Qualifying homeowners.
• Special Exemptions: Seniors, Disabled

Wyoming

• Exemption Amount: Varies; Limits increase to 4% of the prior year for single-family residences
• Eligibility: Qualifying homeowners.
• Special Exemptions: Long-term homeowners, Veterans

Please remember that this is a general overview, and specific details can vary. Consult your state’s tax authority or a local tax professional for the most accurate and current information.

Does Your Residence Homestead Have a Tax Exemption?

Overall, homestead exemptions aid property owners who want to reduce their property tax bills. Property owners can make informed decisions about future property purchases and finances by estimating future ownership costs. Even if there isn’t a blanket exemption for a principal residence, the state may have ways to reduce what they owe through special programs.

Frequently Asked Questions

Do I file a homestead exemption every year? 

This one’s a “yes and no” situation. The rules depend on your state and locality:

• Annual Filing: Some states require homeowners to file their homestead exemption every year. This ensures continued eligibility and often accounts for changes in ownership or residency.
• Automatic Renewals: Other states have a one-and-done process, where the exemption automatically renews unless there’s a significant change, like selling your house or refinancing.

Make sure to check the deadlines for filing based on the tax year, as missing them could affect your eligibility for that year.

Check with your local tax assessor’s office to confirm your state’s requirements.

How do I apply for a homestead exemption? 

Verify your eligibility, gather necessary documents (government-issued ID, property deed, etc.), and submit your application to your local tax assessor’s office before the deadline. Some have an online process, while others require paper documentation.