Homestead Exemption
By definition Homestead exemption is a legal tenant designed to protect the value of the homes of residents from:
• Property taxes
• Creditors
• Forced sale following the death of the homeowner spouse
To be eligible for homestead one must live in a state where the exemptions are available, Georgia is a state that offers this exemption. The home must be listed as the primary residence, but some of these residences are not eligible because limitations on the value of real property.
Homestead tax exemptions are not tax cuts, but rather result in a shifting of tax burden. The Homestead Exemption shifts burden from less expensive homes to more expensive homes, as well as to non-residential property. For example you may claim an exemption for your primary residence, but a home you use as a rental cannot be claimed.
You may apply for homestead exemptions on your principal residence. Homestead exemptions remove part of your home’s value from taxation, so they lower your taxes. An example is this, your home is appraised at $100,000, and you qualify for a $15,000 exemption (this is the amount mandated for school districts), you will pay school taxes on the home as if it was worth only $85,000. Taxing units have the option to offer a separate exemption of up to 20 percent of the total value.
While exemptions vary, several common exemptions are:
• School taxes: All residence homestead owners may receive a homestead exemption from their home’s value for school taxes.
• County taxes: If a county collects a special tax for farm-to-market roads or flood control, a residence homestead owner may receive an exemption for this tax.
• Optional percentage exemptions based on age or disability: Any taxing unit-including a city, county, school, or special district-may offer an exemption base on a home’s value.
It is important to check not only with the rules and regulations for your state as well as your county and city requirements to file the appropriate homestead forms. Some houses are rendered ineligible for many reasons and this fact is often listed on the houses listing sheet so be sure to ask your realtor if you are buying a new home.
