Homestead Exemptions Can Be A Simple Step To Savings
After surviving the stresses of a home search, completing the checklist for a successful closing, and managing the logistics of moving, you’ve finally reached the end of the process, right? Well, almost.
While self-congratulations are certainly in order, there’s one more step you don’t want to overlook. Fortunately, its simplicity and cost-saving results provide ample motivation for this task. If you haven’t done so already, be sure to file a homestead exemption with the entity responsible for collecting property taxes in your area.
What Is A Homestead Exemption?
Hopefully, as part of the purchasing process, you were informed of your responsibility to pay any property taxes assessed on your new home. While the amounts and details can vary widely, most locations will require you to pay annual taxes based on the value of your property.
Similarly, most locations offer a tax break to property owners who use the home as their primary residence. In other words, your rental or vacation home may not be eligible, but the home you live in likely is. By completing the required steps to verify that you qualify, you can shield a portion of the property’s value (possibly a substantial amount) from taxation, thereby lowering your annual tax bill.
In many cases, filing a homestead exemption is as simple as mailing a signed form to your local tax assessment office. Once completed, it often remains in effect until the property is sold or you notify them of a change.
There is typically an application deadline that ensures the exemption takes effect before your taxes are due. While that date differs depending on where you live, extensions or other retroactive avenues may still be available if the deadline has passed.
Additionally, keep in mind that eligibility could depend on having lived in the home on January 1 of the taxed year, meaning you might have to wait until the next year to take full advantage of the exemption. In any case, be sure to speak with a tax or financial advisor to fully understand your exemption options.
Beware Of Scammers
One final note: buying and moving into a new home often means a mailbox full of special offers specifically targeting your status as a new resident. Don’t fall for solicitations from individuals or organizations offering to file a homestead exemption on your behalf for a fee, or claiming payment is due for one that has already been recorded. Take the time to verify that any communications regarding a homestead exemption is taking place directly with your tax-collecting entity.
If closing the deal on the perfect homestead is still at the top of your to-do list, consider partnering with Open Mortgage today. Reach one of our customer-focused lending specialists at 888-602-6626 to discuss all your options.
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