Homestead Exemption- What, Why, Where?
It's that time of the year, the kids Christmas toys are broken, we've all probably floundered on our New Years resolution, and tax time looms. Are you depressed yet? No worry, it's also time to save some money. If you bought a new home last year it's time to file for your Homestead Exemption. You probably remember this phrase being used at your closing as your attorney waded through the mountain of paperwork. Maybe your Realtor has sent you a postcard reminder or your Loan Officer has sent you an email. Either way there is a chance you've heard the phrase but what is it?
Homestead Exemption, while it might have several definitions, in this case is a privilege offered to home owners who claim their home as a primary residence. Think of it as an incentive to invest in real estate property as a primary home vs. renting. This privilege is offered through a reduction in your yearly tax bill. In other words, it saves you money! Got your attention?
Without going into all the exciting details of tax law and accounting I'll briefly explain how it works. Your home is given an "accessed" value by your municipality's county tax assessor's office. This value will normally be somewhat close to the value of your homes Appraised Value that was determined by a professional appraiser during the purchase phase. Each county has a predetermined tax rate that in conjunction with your assessed value determines your yearly tax amount. By giving you an exemption, either by percentage or flat rate, off of your assessed value your tax amount is reduced. Simple enough?
So how do you qualify? You already have. By purchasing a home in the previous year you automatically qualify. You just have to "claim your prize". Taking a few of your loan closing documents, visiting your local tax assessors office, and filling a few short forms ensures you receive the tax break your first full year in the home. This is a one time process that last as long as you live in the home so you only have to make this visit once.
What do you need? Each county's system is different but most require you bring your Settlement Statement and Warranty Deed, and proof of identification. In addition to this you will complete a form that ask questions concerning your personal info, vehicle tag numbers, etc. If any of the counties in our area offer online forms I will include links below.
When do You go? This is very important! You are allowed to file from January 2 to April 1 of each year. Failure to do so will result in either a reduction in the amount you qualify for or none offered at all.
Where do you go? Your local county tax assessors office. Some offices now offer downloadable forms online that can be prepared prior to your visit and printed. I've took the time to add links to each of the tri counties offices adn their online forms. Visit them for more info to better prepare yourself for your visit.
I hope this has been useful in helping you, feel free to pass it along to friends, family, and co-workers. This is a great savings that can help anyone. If you need more information please feel free to contact me.
Click on these links to access more info
Madison County Tax Assessor
Madison County Homestead Exemption Automated Form
Rankin County Tax Assessor
Rankin County Homestead Exemption Application
Hinds County Tax Assessor
Hinds County Homestead Worksheet