Stake Your Claim for Homeowners Property Tax Exemption
Property tax is a huge burden on a homeowner. After your initial outlay for the property, you are then faced with costs for local rates, insurance, and maintenance. On top of that is property tax, which can add between $600 and $8,000 a year to your expenses.
Help to reduce your property tax may be at hand, though. As a homeowner, you may be able to claim exemption from property tax. Here are the facts about homeowner property tax exemptions and what you can do to claim.
What Is Property Tax?
Property tax is a state tax levied on the property. The revenue generated from property tax is used to fund local amenities such as the police, the fire department, or municipal services like garbage removal or street lighting. Property tax is due on most private properties, including:
- Residential homes
- Farms
- Business premises
- Non-removable building fixtures
As a homeowner, you will receive an annual bill for property tax. Failure to pay it or late payment may have serious consequences, including interest, penalties, and even the loss of your home. Many people find themselves needing help paying their property taxes, but there are a few easy ways to reduce your bill.
How Is Property Tax Calculated?
Your property is assessed regularly to determine its fair value. The assessment period varies from state to state, but many areas reassess property values every three years.
The assessment is designed to find a property’s value as the basis for calculating your property tax bill. There are three main methods used to assess the property’s value, namely:
| Approach | Explanation |
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Sales comparison approach | Similar-sized properties in your area that have been sold recently are used to benchmark the likely sale price of your property |
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Cost approach | The cost of building your property from new at today’s rates is used to determine its current value |
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Income approach | The income generated by your property, adjusted for inflation over several years, is used to determine its value |
Other factors that may influence your property’s value are also taken into account, such as:
- Proximity to public services (sewer, water, electricity, and similar)
- Potential as a development property
- Any recent alterations or improvements carried out on the property
A state-appointed assessor determines the taxable value of your property using one or more of the above methods. The value is multiplied by the state or local tax rate—known as the mill rate—to arrive at your tax bill. The mill rate varies widely from state to state, some states being considerably lower than others.
How Can I Claim the Homeowners Property Tax Exemption?
Property tax assessments take into account the current value of your property, so any recent improvements you have made will be reflected in the next assessment.
It should also be a given that you should check your tax bill for any inaccuracies and that you should be present when your property assessment is made.
Claiming for a property tax exemption as a homeowner should not be a daunting process, and DoNotPay can help you find out your eligibility.
What Are the Typical Property Tax Exemptions?
A homeowners property tax exemption is a dollar amount that can be deducted from a property’s assessed value. So if your home is worth $150,000 and you are granted an exemption of $10,000, you will only be taxed on $140,000.
There are many variances to the exemptions allowed from state to state, but one rule is country-wide, namely that you must be using the property for which you are claiming as your primary residence.
There are some state-specific exemptions, but most states offer property tax exemptions in the following categories:
- Senior tax credit
- Income-based tax credit
- Renters’ tax credit
- Veterans’ tax exemption
Senior Tax Credit
If you are over 65 and are using the property as your main residence, you may qualify for a senior citizens’ credit on your property tax.
Income-Based Tax Credit
If your income falls below a certain threshold—which varies from state to state—tax credits are available to ensure your tax bill doesn’t exceed a certain percentage of your income.
Veterans Tax Exemption
In many states, veterans with 100% disability and some veterans’ spouses may qualify for full veterans’ property tax exemption.
Disability Tax Exemption
In many states, people with disabilities such as blindness are eligible for a homeowners tax exemption.
DoNotPay Helps You Claim for a Homeowners Property Tax Exemption
Property tax is daunting, and applying for an exemption may be a scary prospect, but DoNotPay can help you. Follow DoNotPay’s advice, and we can help you check your eligibility and understand how to apply for an exemption.
has a property tax guide that checks your location and gives you customized advice on what exemptions are available in your area. The guide comes with two sections:
| Property Tax Exemptions | Property Assessment Appeals |
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How Do I Get DoNotPay’s Property Tax Guide?
The process of getting our guide couldn’t be easier. Follow these three steps to obtain it:
- Go to DoNotPay in any , sign up, and find the Property Tax feature
- Answer some of our chatbot’s questions
- Wait for the app to give you a customized guide to property tax reductions
How Else Can I Save Money on My Property Tax Bill?
If you want to keep your tax bill as low as possible, make sure you:
- Avoid any value-adding renovation or improvement work
- Check your property tax bill thoroughly for any inaccuracies
- Be present when the state assessor performs the appraisal
Finally, you can appeal your property tax assessment. Although this may sound like a nightmarish process, DoNotPay can help!
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