Homestead Exemption: How It Works and How To Apply
A homestead exemption is a common tax break that could cut hundreds of dollars off your yearly property tax bill. But a lot of homeowners fail to apply because they don’t know about it — leaving money on the table.
Many state and local governments offer a homestead exemption that typically reduces your home’s assessed value by a percentage or set dollar amount when calculating property taxes. If you pay your property taxes through an escrow account with your lender, this tax break can even lower your monthly mortgage payment.
This benefit varies wildly depending on where you live. Some states offer a large property tax exemption to any homeowner who lives in their home full time. Others offer smaller ones or limit these tax breaks to groups such as seniors, veterans, low-income residents or those with a disability.
- A homestead tax exemption can save you money on property taxes and reduce your mortgage payment if you pay your property taxes through your lender. You need to live in the home as your primary or permanent residence to get this tax break.
- You typically need to apply for a homestead property tax exemption. It’s important to know the application deadline so you don’t miss out.
- Exemption amounts and eligibility rules vary based on state, county and city. Check with your county assessor’s office to learn about your local homestead exemption and see if you qualify.
How does a homestead exemption work?
A homestead exemption is a property tax break that state and local governments offer to homeowners on their primary home, but not on second homes or investment properties. Property taxes may include county, city and school taxes, and exemptions may apply to only one of these areas.
States and local governments structure these homeowner tax benefits differently. A government may reduce a home’s assessed value by a percentage or by a set dollar amount when calculating property taxes. In addition to or instead of a property tax exemption, a state may offer a property tax credit or a refund.
To get a homestead tax exemption, you typically need to fill out an application. You will likely have to provide documentation to prove you qualify. For example, you will need to show that your home is your permanent residence and may need proof of age, veteran status or income.
Let’s look at an example to see how a homestead exemption might work and how much you can save. Imagine you own a home assessed at $250,000 and your state offers a $45,000 homestead tax exemption. You also have a disability, so you qualify for an additional $5,000 exemption.
With your standard homestead exemption and your disability exemption, you owe property taxes on only $200,000 rather than the full $250,000.
With a 1% property tax rate, which is close to the national average, you’d owe $2,000 in property taxes, saving $500 with the exemption. If you pay your property taxes through an escrow account with your mortgage lender, you save about $42 a month on your mortgage payment.
How your monthly payment breaks down
- Principal & Interest
- $2,023
- Property Taxes
- $400
- Homeowner Insurance
- $125
- HOA Fees
- $0
- PMI
- $0
Total loan breakdown
- Principal
- $320,000
- Interest
- $408,142
- HOA, Insurance, Taxes & PMI
This total includes estimated homeowners insurance, property taxes, and PMI, if applicable. These costs are separate from your principal and interest payment. - $189,000
Who qualifies for a homestead exemption?
Ownership and residency requirements
Homestead exemption qualifications vary by state. Some states offer a general homeowner exemption to anyone who owns their primary residence and meets other requirements. You may need to show:
- A deed to the home listing your name and any co-owners
- The property address and parcel ID
- A driver’s license or utility bill proving the home is your primary or permanent residence
Exemptions for seniors, veterans and other groups
If a standard exemption is available, certain groups may be eligible for additional or larger exemptions. In some locations, exemptions are available to:
- Seniors age 65 or older
- People who are blind or have disabilities
- Military veterans and surviving spouses
- Lower-income homeowners
Check with your local government to learn whether you qualify and what you need to do to get a property tax exemption. You may need to fill out an application and show proof of age, disability, income or military service, if any apply.
Homestead exemptions by state
Owning a home offers a variety of benefits, including tax benefits. Click on your state to see what exemptions are available where you live and to get a link to more information. Note that seniors are generally defined as those 65 and older. If you’re curious how your state stacks up, here’s where homeowners pay the highest and lowest property taxes.
States with homestead tax exemptions
| State | State tax exemption details |
|---|---|
| Alabama | Seniors and those with a permanent and total disability receive a complete exemption from the state portion of property tax and a $5,000 exemption from the county portion. Other taxpayers are capped at a $4,000 assessed value for state taxes and $2,000 assessed value for county taxes. All homestead tax exemptions are limited to 160 acres. |
| Alaska | Homeowners may be eligible for an exemption on up to $54,000 in assessed value. |
| Arizona | Seniors, widows/widowers and people with disabilities can qualify for exemptions based on income, property value, residency and the number of adult family members. |
| Arkansas | Your annual tax bill could decrease by $500 or $600 starting with 2026 tax bills. Seniors or taxpayers with disabilities could freeze their home’s assessed value for tax purposes. |
| California | Qualifying taxpayers can receive a $7,000 exemption. |
| Colorado | Qualifying homeowners can receive a homestead exemption of up to $250,000. Disabled and elderly homeowners are eligible for an exemption of up to $350,000. |
| Connecticut | Up to $250,000 of a homeowner’s primary residence is exempt from money judgments. |
| Delaware | Seniors may qualify for a 50% exemption from regular school property taxes, up to $500. |
| Florida | Qualifying homeowners may receive an exemption that reduces the property’s taxable value up to $50,000. Military members, veterans, seniors and widows/widowers of first responders may receive further benefits. |
| Georgia | Taxpayers may receive a $2,000 exemption; seniors may receive $4,000; veterans with a disability may receive $32,500; unremarried surviving spouses of U.S. service members may receive $60,000; unremarried surviving spouses of first responders may receive a complete exemption. |
| Hawaii | Homeowners over the age of 65 or who are head of household can qualify for a $30,000 exemption, while other homeowners can qualify for a $20,000 exemption. |
| Idaho | Qualifying taxpayers can get a 50% exemption (up to $125,000) on their home and up to one acre of land. Veterans with a disability may receive further exemptions. |
| Illinois | Exemptions go up to $10,000 in Cook County and $6,000 to $8,000 in all other counties. Veterans, seniors, people with disabilities and those affected by natural disasters may qualify for other reductions. Seniors who meet other qualifications may receive a valuation freeze. |
| Indiana | Indiana is phasing out its 60% exemption up to $48,000 on a home and one acre of land. It will be $40,000 for 2026 and will be reduced by $10,000 a year until elimination in 2030. It will increase the supplemental homestead deduction from 43% in 2026 to 66.7% in 2031 and beyond. New property tax credits are available for homeowners who are blind, disabled or 65 or older. |
| Iowa | Qualifying homeowners may receive an exemption of 10% of the property’s taxable value, not less than $5,500 and not more than $20,000, adjusted for inflation each year. Homeowners age 65 or older are eligible for an additional exemption of $6,500 of taxable value. |
| Kansas | Homestead refunds of up to $700 are available to residents who make $43,389 or less, have lived in the state for at least one year and meet age, disability or dependent children requirements. |
| Kentucky | Exemptions are based on age, disability and veteran status; the maximum exemption is currently $49,100 and is adjusted for inflation every two years. |
| Louisiana | Qualifying taxpayers can get an exemption of $7,500 of the assessed value of a homestead ($75,000 fair market value). Veterans with a disability and their widow or widower may qualify for further benefits. |
| Maine | Exemptions for up to $25,000 of the just value of the home are available to qualifying residents. War veterans with 100% disability status or who are 62 or older may receive a $6,000 exemption; certain totally and permanently disabled veterans, $50,000; individuals who are legally blind, $4,000. |
| Maryland | Maryland offers a homestead tax credit rather than an exemption for certain qualifying homeowners. |
| Massachusetts | Automatic exemption up to $125,000, up to $1 million for those who file for homestead protection. |
| Michigan | There are several exemption programs, including those for: veterans with a disability, low-income earners, air pollution control, redevelopment, nonprofit housing and commercial facilities. |
| Minnesota | An exemption of 40% is available for homesteads valued at $95,000 or less and is gradually phased out as value increases; it is not available for homesteads valued at $517,200 or more. Additional exemptions apply to disabled veterans and properties damaged by mold, and some lower-income homeowners may receive a credit. |
| Mississippi | Qualifying homeowners who are 65 or older or totally disabled may receive an exemption of $7,500 of the property’s value; others may receive a credit of up to $300. |
| Missouri | Seniors and individuals with a disability may qualify for an exemption up to $1,100. |
| Montana | Homeowners may qualify for a 30% to 80% property tax reduction based on income. |
| Nebraska | Seniors, people with disabilities and the surviving spouses of veterans with a disability may qualify for homestead tax exemptions depending on income. |
| Nevada | You can shield up to $605,000 of your home equity from creditors by filing a homestead declaration. |
| New Hampshire | Exemptions for veterans, seniors and low- and moderate-income homeowners are available. State law also allows each person to protect up to $400,000 in homestead value from creditors. |
| New Jersey | An exemption is available for 100% disabled veterans, and qualifying seniors and veterans may be eligible for a property tax credit. |
| New Mexico | New Mexico has a $2,000 “head of family” exemption instead of a homestead exemption. Qualifying veterans may receive a $4,000 exemption. Veterans and surviving spouses may qualify for a $10,000 exemption, and “100% disabled” veterans could be completely exempt. |
| New York | Veterans, seniors and people with disabilities may qualify for exemptions. Homeowners earning $500,000 or less annually can qualify for the School Tax Relief (STAR) credit. |
| North Carolina | Seniors and people with disabilities earning less than $38,800 annually may get a 50% exemption or $25,000, whichever is greater. |
| North Dakota | Seniors and people with disabilities with a maximum $70,000 annual income are eligible for a homestead property tax credit. |
| Ohio | Seniors with low income and persons with disabilities can get an exemption up to $29,700, while a disabled veteran or surviving spouse of a service officer killed in the line of duty may get an exemption up to $59,400. |
| Oklahoma | Qualifying homeowners may get a $1,000 exemption off their home’s assessed value. Additional exemptions are available for veterans with a disability and heads of households. Seniors may qualify for a valuation freeze. |
| Oregon | Oregon has more than 100 exemption programs, including those for seniors and veterans. |
| Pennsylvania | Qualifying taxpayers can receive a homestead or farmstead exemption on their primary residence. |
| Rhode Island | Seniors, people with disabilities, low-income homeowners and veterans may qualify for an exemption. |
| South Carolina | Seniors and people with disabilities may qualify for an exemption on the first $50,000 of your home’s value. |
| South Dakota | South Dakota offers a property tax exemption on up to $200,000 in value for disabled veterans. Seniors and people with disabilities can get a property tax refund if they meet household income limits. |
| Tennessee | Homeowners with a disability or low-income seniors can get up to a $33,600 exemption. Veterans with a disability and their surviving spouses can get up to a $175,000 exemption. |
| Texas | Texas has no state property tax. A $140,000 homestead tax exemption helps reduce local tax bills. There is additional relief available for veterans, seniors, people with a disability and surviving spouses of veterans and first responders. |
| Utah | Most Utah residents receive a 45% exemption on a residential property and one acre of land. |
| Vermont | Vermont residents may declare their primary homes as homesteads to potentially qualify for a lower education property tax rate than non-homesteads. |
| Virginia | Homeowners may be eligible to exempt $50,000 of value from creditors. Veterans with permanent and total disability from a line-of-duty injury may qualify for an additional exemption. |
| Washington | Exemptions are available for veterans and their surviving spouses, homeowners with low income, seniors, people with disabilities and nonprofit organizations. |
| Washington, D.C. | Washington, D.C. offers a homestead deduction that reduces a property’s taxable value by $91,950, while disabled veterans and surviving spouses may be able to get a reduction of $445,000. Seniors and people with a disability with a household income of less than $163,500 also receive 50% tax relief. |
| West Virginia | Seniors and people with disabilities can get an exemption on up to $20,000 in assessed value. |
| Wisconsin | Veterans, surviving spouses, individuals with a disability and those who earned a household income of less than $24,680 may qualify for exemptions. |
| Wyoming | Qualifying veterans and surviving spouses are eligible for an exemption, while other taxpayers may be eligible for property tax relief based on income. |
What are the benefits of a homestead exemption?
A homestead exemption provides two main benefits for homeowners:
- Property tax reduction. Filing a homestead exemption reduces your home’s taxable value by “exempting” a certain amount. This, in turn, lowers your property tax bill.
- Protection from creditors. A homestead tax exemption can protect your home from creditors if you encounter financial hardship. Creditors typically can’t force the sale of your house to repay your debt if your home equity amount is less than your state’s exemption amount.
How to apply for a homestead exemption
1. Find out the requirements in your state
The first step is to look up the specific requirements in your state. You can find this information by visiting your state’s tax revenue department website. Or, you can do a Google search for “(your state) homestead exemption.”
2. Collect the necessary information
The information and supporting documents you’ll need to submit along with your homestead exemption application also vary by state, county and city. However, you may need to provide:
- A government-issued ID (like a driver’s license)
- Proof of residency (like a driver’s license or utility bill)
- Social Security numbers for you and any co-owners
3. File the homestead exemption with the appropriate government office
Once you’ve confirmed your eligibility and what you’ll need to apply, submit the homestead application in person, online or over the phone to the appropriate government agency. This is usually your local tax assessor or property appraiser’s office.
Alternative ways to lower your property tax bill
- Appeal your assessment. Property taxes are based on your home’s assessed value. If you feel that value is too high, your local government will have an appeal process. Start by contacting the county assessor or property appraiser’s office. During the process, it may be helpful to look at the assessed values of similar homes in your neighborhood.
- Check for errors. If your home’s square footage is wrong, or your assessment shows a feature that is no longer there, it could affect your home’s assessed value and, thus, your property tax bill.
- Seek out available credits. In addition to exemptions, many state and local governments offer tax credits, assessment freezes and other ways to lower your property tax bill. Check with your local government to make sure you’re taking advantage of all available tax breaks.
- Think twice before making big changes. Considering adding a guest cottage, pool or other big addition to your home? First consider how it may affect your assessed value and your property tax bill. If the math doesn’t add up, skip or downsize the project.
- Look at specialty exemptions or credits. Some home improvements may pay off with special tax breaks. For example, you may get an exemption or credit for installing solar panels or other energy-efficient projects.
Frequently asked questions
A homestead exemption may lower your mortgage payment. If you pay your property taxes through an escrow account with your mortgage lender, a lower property tax bill could reduce your monthly payment. If you pay your property taxes directly to your local government, an exemption would not lower your mortgage payment.
No, a homestead exemption does not reduce the actual balance you owe on your mortgage. However, if you pay your property taxes through your mortgage lender, owing less in property taxes can reduce your monthly payment. That does not lower the amount of principal or interest on your mortgage.
A homestead exemption can protect some or all of your home equity if you file for bankruptcy, but generally won’t prevent foreclosure for missed mortgage payments. Specific protections vary by state. If your equity exceeds your state’s homestead exemption, creditors may force a sale, but you’d still typically get the protected amount back.
Homestead exemptions are specifically designed to lower property taxes you pay on your main residence. That means a second home or rental property generally does not qualify for a homestead exemption. In some states, if you live in part of a duplex or small multifamily building and rent out the rest, you may be able to get a homestead exemption for the part you occupy as your primary residence.
You may be able to claim more than one homestead exemption on your primary residence based on where you live and your age, income, military service and disability status. Some governments offer a main homestead exemption with additional exemptions for certain groups, such as seniors, veterans, surviving spouses or those with disabilities. Because a homestead exemption is intended for your primary residence, you typically can’t claim one on multiple properties.
If you are denied a homestead exemption, you may appeal the denial. You’ll typically need to contact the property appraiser’s office and submit a written appeal within a set time frame after you receive the denial. If your appeal is denied, you may have further recourse. It’s important to check your local appeal rules and process to ensure you follow the correct procedure.
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