In the Philadelphia area when you look up a property for taxes, revenue etc.., Under account information it has the word "Homestead". Some of the properties have a dollar amount under thar word, some do not. Please explain. Thanking you in advance.
Homestead is the land and home which is occupied by the owner as his principal dwelling and is protected from liability for any debts of the owner (other than a mortgage). In short, if you declare bankruptcy the courts cannot seize your homesteaded property to pay off those debts.
Homestead law is unique to the United States. It started in Texas when it was an independent nation, and has since spread to many other states.
In addition to protection from debt liability, there are also certain tax protections for homesteads. Here in Texas yearly tax appraisals are capped at 10% for homesteaded properties.
So if you look at the taxpayer database in Houston, where property values have been soaring the last few years, you will see the "market value" and the "appraised value." For homesteaded properties the "appraised value" can be significantly lower than the market value. If you own a rental property, which can't be homesteaded, your appraised value will be the same as the market value.
There is an additional homestead exemption for people 65 and older. Their appraised value on homesteaded property is frozen once they turn 65.
Does that make sense?
@Fred Heller has written a great explanation.
In addition to what he has said, in Philadelphia specifically, there is a Homestead exemption that can be applied for by resident owners. The basic effect of the exemption is to lower the tax basis of your assessed property value by $30,000.
Per the OPA website....
"The Philadelphia Homestead exemption offers real estate tax savings to homeowners by reducing the taxable portion of their property assessment by $30,000. Homeowners should still apply as close to the September 13th deadline as possible, so that the savings can be reflected in their 2015 real estate tax bill"
Hi, I own an owner occupied, 3 family unit. The market value of my home is lower than the sale price. Did I over pay? Secondly, I am going to apply for the Homestead Exemption. The online application asks what part is used for business or rental. I live in 1 unit and use the yard and the other units are occupied by tenants. So, I will say 66% of the property is used for rental. Does that % make sense? Would I still get the exemption? Thanks for your response!Homestead Exemption
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