valuation
homestead exemption
A homestead exemption is a property tax benefit that reduces the taxable assessed value of an owner's primary residence, lowering the annual property tax bill. Eligibility usually requires that the owner occupy the home as a principal residence, and some states offer larger exemptions for seniors, veterans, or people with disabilities. The amount, application process, and deadlines vary by state and locality.
- Exam tip
- Subtract the exemption from assessed value before applying the tax rate. Don't confuse it with homestead protection from creditors.
- Example
- A home assessed at $250,000 with a $25,000 homestead exemption is taxed on $225,000.
Related terms & state variants
Sources
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Last verified: 2026-10-23