Owning a home, it is a dream of everyone. But this dream comes with hefty tag. When you decide to buy a home, you need to consider along with actual cost, other expenses like property tax. In United States the average property tax is equal to 2,000 USD yearly.
In some locations A homeowners property tax exemption is called a homestead exemption. You can spare you a few dollars when it comes to maintaining your property over the years. The rules for qualifying for homestead exemption is vary depending on location.
A homestead exemption is amount of money that is deducted from assessed value to the property. This usually does not cut your tax bill dollar to dollar, but it nevertheless lowers your tax bill because you will be paying a percentage of the lesser amount. The value of your home is multiplied by the applicable tax rate based on your state or locality.
Standard exceptions can range from very minor to quite significant. The tax exemption in San Mateo County is 7,000 USD in, California and rises to 10,000 USD in Cook County, Illinois, where Chicago is located, for the 2017 tax year. Of course, this is all relative, because real estate in these areas usually costs more.
How to be qualified for a homeowners tax exemption? As we mentioned above rules can vary significantly depending on the location. The common rule for all states is you have to use your primary as your primary residence.
This “you must live there” rule largely prevents you from claiming a homeowner’s exemption for more than one property.
Income base exemptions. For instance, you have combined income less than 100,000 USD and if the assessed value of property is more than allowed maximum by your state, then you can apply for Longtime Homeowner Exemption. Additionally, you must live in property minimum for 10 years.
Citizens who are 65 and older are qualified for homeowners tax exemption. This type of exemption is considered as “extra ” exemption additional to standard one. As mentioned above the rules are varying depend on the location. For example, in the state Washington in order to be qualified you have to reach 61st birthday. In New Hampshire as older you get more and more exemption you receive. Additionally to age requirements you have to meet low-income requirements.
In some states this type of an exemption can eliminate your tax burden according to the value of your home. For instance, if you live in Alaska you have to reach your 65th birthday, then you can receive tax-free the first 150,000 USD on the value of your home.
Disabled people are also offered special exemptions regardless whether they served in the armed forces. To do so you have to prove your disability by showing that you receiving Social Security disability benefits.
One more time homeowners tax exemptions changeable depending on your location. The first thing to do for the application contact the property tax authority in order to find what is available in your location. As mentioned above specific exemptions and the rules can be applied to the specific area. So, you need to do a little research.
The next step is to submit your application to the state tax authority. This process can be totally free of cost or with a small fee in some states. Also you need to provide some information about your property which can be found on your deed.
Some areas year after year will automatically review your application after your first time being approved exemption. When you apply and get approval for the first time then in some areas your exemption will automatically be renewed in case you have not sold your property.