Homestead exemption: what it is, what it saves, how to apply

If you own the home you live in, your state may take part of its value off the table before calculating your property taxproperty taxProperty tax is the tax the county, city, school district and other local bodies charge real property owners every year to pay for schools, police, fire and other public services. It is computed on the value the assessor's office assigns to your home, at each body's rate, minus the exemptions you qualify for, such as the primary-residence exemption in many states. If you have a mortgage you normally pay it month by month inside your payment, through the escrow account. It is generally deductible on your federal return if you itemize.See the full definitionClose. That discount is called the homestead exemptionhomestead exemptionA homestead exemption is a legal protection for the home where you and your family live. It can keep certain creditors from collecting your debts out of your main home, and it can also lower the property tax on that home. In Texas, for example, the residence homestead exemption removes part of your home's value from the tax calculation; to get it you must own the home, live there as your principal residence and apply. State laws vary widely: some cap the amount protected and others depend on the size of the property or the owner's age.See the full definitionClose, or principal residence exemption. This guide is for owners who live in their home, especially recent buyers: it explains what the exemption is, who qualifies, how much it lowers the value in three large states, how to apply, which dates you must not miss and when you lose it.

What Texas school districts take off the value of your main home

$140,000¹

How much a main home's taxable value can drop in Florida

Up to $50,000⁷

How much an owner-occupied home's taxable value drops in California

$7,000⁹

What the typical US homeowner pays in property tax per year (Census, ACS)

$3,119

What it is and what exactly it lowers

Property tax is local. In Texas, for example, the state Comptroller explains that there is no state property tax: the county, city, school district and other districts set and collect it.¹ Each one starts from the value the appraisal office gives your home, the assessed valueassessed valueAssessed value, or assessment, is the value the local government's assessor gives your property to calculate property tax. It is only for taxes: it is not the appraisal a lender orders for your mortgage. The assessor first estimates market value, usually by comparing your home with similar homes that sold recently. In some places the assessment equals full market value, and in others it is a fraction of it. The assessor does not decide how much you pay: that depends on the rates set by the county, the city and the school district.See the full definitionClose, and applies its rate.

The homestead exemption works before that calculation: it takes part of your main home’s value out of what gets taxed.¹ It does not lower the rate or erase the bill. The Texas Comptroller explains it with an example: if your home is appraised at $300,000 and you qualify for the $140,000 school exemption, you pay school taxes as if the home were worth only $160,000.¹ What you save is that exempt value times your local tax rates.

In some states the exemption also brings a limit on how fast the value can rise. In Florida, homestead property is reassessed every January 1, and the increase cannot exceed the lower of two caps: 3% of the prior year’s value or inflation as measured by the Consumer Price Index.⁶ That limit is called “Save Our Homes.” That is why, in Florida, applying on time also protects your bills in later years.

This guide uses Texas, Florida and California as examples because their agencies publish the rules in detail. Your state’s rules may be very different: look them up on your state’s page, under the property tax tab, where we gather exemptions and deadlines with their official source.

Who qualifies

The three states ask for the same core things: that you own the home, that you live in it as your main residence and that you have only one homestead. The details and the date that counts differ.

Requirement	Texas	Florida	California
Own it	Ownership interest in the home	Legal or beneficial title on January 1, with the deed recorded	Owner who occupies the home
Live there	Principal residence	Your permanent residence or your dependents’	Principal residence on January 1
Only one	No other homestead, in or outside Texas	No residency-based exemption in another state	One principal residence

In Texas, a person must have an ownership interest in the home and use it as their principal residence, and must state that they do not claim another homestead in or outside the state. If you bought after January 1, you may receive it right away for the rest of the year, as long as the previous owner did not receive it that year.¹

In Florida, the exemption goes to a person who on January 1 holds title to the home and in good faith makes it their permanent residence or that of their dependents. The deed must be recorded in the county. A person receiving an exemption or credit in another state that requires permanent residency does not qualify.⁴

In California, the home must be the owner’s principal residence on January 1, the lien date.⁹

How much it lowers: three states, three rules

The main home exemption in three states

Exempt value per taxing unit

Texas

• School districts exempt $140,000; other units may add up to 20% of the value, never less than $5,000.¹
• At 65 or older or with a disability, schools exempt $60,000 more.¹
• You apply at the county appraisal district, generally before May 1.¹

Up to $50,000 plus a cap on increases

Florida

• The first $25,000 applies to all taxes; another $25,000 applies only to non-school taxes on value over $50,000.⁷
• It triggers the Save Our Homes cap on yearly value increases.⁶
• You apply to the property appraiser by March 1.⁷

Fixed reduction

California

• Lowers the taxable value of the home the owner lives in by $7,000.⁹
• You file Form BOE-266 once.⁹
• To get the full amount, by February 15.⁹

The amount and the deadline change by state: check yours before assuming you already have it.

Texas has more layers. Counties that collect farm-to-market road or flood control taxes provide another $3,000.¹ For people 65 or older or with a disability, each taxing unit may add a local exemption of at least $3,000; for the disability exemption, the Social Security definition counts, and benefits from other programs do not qualify on their own.¹

In Florida, the additional part of the exemption is adjusted every January 1 for inflation, if the index goes up.⁷ Outside these three states there are other examples. In Illinois, the General Homestead Exemption is annual and lowers the equalized assessed value (EAV) by up to $10,000 in Cook County, $8,000 in the counties next to Cook and $6,000 everywhere else.¹¹ In New York, the main relief is STAR, for school taxes: new homeowners register for the STAR credit, which arrives by check or direct deposit, because the STAR exemption is no longer available to them.¹²

What the exemption is worth in dollars also depends on your local rates. The table compares the effective tax rate and the typical home value in the states that already have a page on this site; tap your state’s name to see its exemptions and deadlines.

Effective property tax rate and typical home value by state

State	Property tax (effective rate)	Typical home value
Alabama	0.38%	$209,900
Alaska	1.11%	$352,900
Arizona	0.48%	$394,500
Arkansas	0.55%	$188,000
California	0.7%	$734,700
Colorado	0.48%	$539,400
Connecticut	1.81%	$366,900
Delaware	0.5%	$352,000
District of Columbia	0.58%	$737,100
Florida	0.76%	$359,000
Georgia	0.77%	$303,300
Hawaii	0.27%	$839,100
Idaho	0.49%	$418,600
Illinois	2.01%	$263,300
Indiana	0.74%	$218,200
Iowa	1.39%	$208,000
Kansas	1.29%	$217,200
Kentucky	0.75%	$205,600
Louisiana	0.55%	$216,500
Maine	1.02%	$296,600
Maryland	0.97%	$419,900
Massachusetts	1.07%	$562,100
Michigan	1.25%	$231,600
Minnesota	1.02%	$329,300
Mississippi	0.72%	$169,800
Missouri	0.85%	$230,300
Montana	0.72%	$375,800
Nebraska	1.49%	$238,600
Nevada	0.47%	$435,400
New Hampshire	1.66%	$402,500
New Jersey	2.11%	$454,400
New Mexico	0.7%	$248,100
New York	1.55%	$423,800
North Carolina	0.66%	$288,900
North Dakota	0.99%	$249,900
Ohio	1.31%	$214,800
Oklahoma	0.8%	$199,800
Oregon	0.81%	$477,600
Pennsylvania	1.3%	$254,500
Puerto Rico	0.49%	$131,500
Rhode Island	1.21%	$404,200
South Carolina	0.48%	$259,000
South Dakota	1.06%	$257,400
Tennessee	0.5%	$286,700
Texas	1.49%	$283,800
Utah	0.52%	$489,400
Vermont	1.59%	$316,600
Virginia	0.73%	$383,700
Washington	0.81%	$564,600
West Virginia	0.53%	$162,600
Wisconsin	1.42%	$266,500
Wyoming	0.57%	$309,700

The effective rate divides the median amount owners pay by the median home value. Where the rate is higher, each exempt dollar counts for more. Source: Census Bureau (ACS)

How to apply, step by step

From the appraisal office to your bill

1. 1. Find the office that appraises your home

   As soon as you are the owner

   In Texas it is the county appraisal district; in Florida, the property appraiser;⁷ in California, the county assessor.⁹¹

2. 2. Get your state's form

   Before the deadline

   In Texas it is Form 50-114;² in Florida, DR-501, and many offices accept it online.⁷

3. 3. Gather your documents

   When you fill out the application

   Texas asks for a copy of your state driver's license or ID showing the home's address; Florida asks for your Social Security number.⁵²

4. 4. File on time

   Texas: April 30 · Florida: March 1 · California: February 15

   These are the general dates in Texas, Florida⁷ and California;⁹ if you missed yours, there may still be a late window.²

5. 5. Check your notice and your bill

   When the appraisal notice arrives

   In Florida, the property appraiser mails you a renewal every year by February 1.⁵

6. 6. If you are denied, push back

   Within the period on the notice

   In Texas you can protest to the appraisal review board, including over exemptions; in Florida, petition the value adjustment board.⁵³

In Texas, the application goes to the appraisal district in each county where the property is located, never to the Comptroller. Form 50-114 says it is generally due no later than April 30 of the year you are applying for. If you missed it, you can file a late application up to two years after the deadline. And once it is granted, you do not have to reapply every year unless the chief appraiser requires it.² The chief appraiser decides whether you qualify.¹

In Florida, the law says that if you do not file by March 1 you waive the exemption for that year, with some exceptions.⁵ One of them: you can still file until the 25th day after the property appraiser mails the assessment notice, and the appraiser can grant it if you show extenuating circumstances. If the appraiser does not, you can petition the value adjustment board within the same period, with a nonrefundable $15 fee.⁵

In California, the owner files Form BOE-266 once with the county assessor. You can file as soon as you qualify, but to receive the full exemption for that year it must arrive no later than February 15.⁹

Documents, Social Security numbers and ITINs

Each state decides which documents it asks for. In Texas, you must attach a copy of each owner’s driver’s license or state-issued ID certificate, and the address must match the home’s; there are exceptions only for certain cases. The form also asks for the driver’s license, ID or Social Security number, and it states that the driver’s license or ID number is confidential and not open to public inspection.²

In Florida, the law requires the form to include a space for the Social Security numberSocial Security number (SSN)A Social Security number (SSN) is the nine-digit number on a Social Security card. It is issued by the Social Security Administration (SSA), a federal agency, and you need it to work and to collect government benefits. The IRS also uses it as your taxpayer identification number on tax returns. You apply with Form SS-5 and proof of identity, age and U.S. citizenship or lawful immigration status, and the service is free. People who must file taxes but cannot get an SSN use an ITIN. Identity thieves look for this number; the government advises keeping the card in a safe place and not carrying it in your wallet.See the full definitionClose of the applicant and the applicant’s spouse. If the application arrives on time but without those numbers, it is incomplete: the property appraiser contacts you and you can refile a complete application by April 1.⁵ The appraiser may also ask for proof of residency, such as your Florida driver license or ID number, the address on your last IRS return or utility payments at the home.⁷

If this is you

You just bought

In Florida, the previous owner's exemption stays with the home for the rest of the year, and the home is reassessed the next January 1.⁸ Apply for yours in time for that year.

You are 65 or older or have a disability

In Texas, school districts exempt $60,000 more for people who qualify by age or disability.¹ You apply on the same form.

You are a disabled veteran

In Texas, the amount depends on your disability rating, and at 100% your main home can be fully exempt.¹

You inherited the family home

In Texas, if your name is not on the deed, the district asks for an affidavit, the death certificate and a utility bill.¹

When you lose it and who to tell

The exemption is for the home you live in. When that changes, so does your right to it, and telling the office is your responsibility.

• Texas: you must notify the chief appraiser in writing before May 1 of the year after your right to the exemption ends.²
• Florida: you are no longer eligible if you rent the unit out, if it is no longer your permanent home or if you are no longer a permanent Florida resident.⁷ If the home changes owners, it is assessed at just value the following January 1.⁶
• California: the exemption stays in effect until, among other cases, the owner no longer lives in the home as a principal residence.¹⁰ Claimants must notify the assessor when they no longer qualify; December 10 is the last day to cancel it without a penalty.⁹

If you bought in Florida, keep the purchase year in mind. When a home changes owners, the law requires removing the exemptions and reassessing it at just value. The seller’s exemption and Save Our Homes benefit stay with the home for the rest of that year. If you own the home on January 1 and apply by March 1, that year’s bill already reflects the reduction, but the Save Our Homes cap starts the following year.⁸ That is why the seller’s bill does not tell you what you will pay; the property tax guide explains how yours is calculated.

If you have a mortgage with escrowescrow accountAn escrow account is an account set up by your mortgage lender to pay certain property-related expenses on your behalf, mainly property taxes and homeowners insurance. The money comes from a portion of your monthly mortgage payment: each month you contribute a share and the loan servicer pays the bills when they come due. That is why your payment is higher than principal and interest alone, and why it can change when taxes or the insurance premium go up. In some states the word also names the period between the offer and the closing.See the full definitionClose, the exemption also shows up in your monthly payment. The servicer pays the tax from that account, and when the tax changes, your escrow payment and your total monthly payment change with it.¹³ The guide on why your escrow payment went up explains that yearly review.

Common mistakes

• Mistake: Assuming the seller's exemption transfers to you.

  Instead: In Florida, a change of owner removes the exemptions and the home is reassessed.⁸ Apply for your own.

• Mistake: Thinking the exemption is automatic.

  Instead: In Texas, in most cases you must apply at the county appraisal district.¹

• Mistake: Missing the deadline and doing nothing.

  Instead: In Texas you can file a late application up to two years after the deadline.²

• Mistake: Sending the application to a state office.

  Instead: It goes to the appraisal office of the county where the home is, not to the Texas Comptroller.²

• Mistake: Renting the home out and keeping the exemption.

  Instead: In Florida you lose eligibility if the unit is rented.⁷ Tell the appraisal office.

• Mistake: Claiming a main home in two states.

  Instead: Florida does not grant it to someone receiving a residency-based exemption in another state.⁴

What to do this week

1. Find your latest appraisal notice or tax bill and check whether it shows the homestead exemption.
2. Open your state’s page and check the property tax tab for available exemptions and the deadline; in Texas, for example, the general one is before May 1.¹
3. Download your county’s form and gather the recorded deed and your proof of residency.⁷
4. If the 65-or-older, disability or veteran exemptions apply to you, ask whether they go on the same form.¹
5. If you have questions about your budget or your mortgage, a HUD-approved housing counselorHUD-approved housing counselorA HUD-approved housing counselor works at an agency HUD has approved to provide housing counseling: independent, expert advice customized to your situation about buying a home, renting, a missed mortgage payment, a foreclosure or credit problems. The agencies usually charge little or nothing; many serve in Spanish and offer the homebuyer education course several assistance programs require. They are not lenders or real estate agents and sell you nothing. Your county page lists the official agencies with phone numbers.See the full definitionClose gives independent advice, often free or at low cost.¹⁴ Find one with the HUD-approved counselors guide.