Who Qualifies for Property Tax Exemption?

Property tax exemption allows a taxpayer to avoid paying some portion of (if not all) taxes on their property provided he or she can meet certain requirements. The exemptions are usually different depending on the state and, in some cases, the city where the taxpayer lives. In many cases, different states have very similar, but not quite identical exemptions. In order to figure out whether or not he or she qualifies for any property tax exemption, tax payers should examine the laws of their local state, county and city laws in order to find out what kind of exemptions, if any, they qualify for.

Understanding Property Taxes

Property taxes are taxes labeled on valuable personal property. Usually, this means real estate, but it can also mean expensive cars, boats, RVs and business inventories. They are levied by both local governments on state, county and municipal level. The funds collected from the taxes are used to pay for schools, welfare programs and other local social services in the area where the taxpayer resides.

Over the years, various state, county and city governments passed laws that created exemptions that allowed certain types of taxpayers to either pay a fraction of the usual property taxes or not pay them at all. This reduces their tax burden while allowing them to own property that they may not have otherwise been able to afford to keep. The eligible taxpayers are citizens (both native-born and naturalized), permanent residents and, in some cases, citizens of other NAFTA countries. There are a number of factors that can determine whether or not a taxpayer qualifies for an exemption. This includes their age, economic status, the type of property he or she owns and how that property is used.

Common Property Tax Exemptions

The following property tax exemptions don't exist in every jurisdiction, but they are still fairly common across the United States. While the finer details may vary on local level, the basic idea remains the same. They are:

Senior citizens exemptions - taxpayers who are sixty five years or older and whose annual income is below a certain amount are eligible for these exemptions. This usually applies the senior citizens of lower income brackets only.

Disability exemptions - taxpayers that have permanent disabilities are eligible for this exemption. Some jurisdictions have general exemptions while others have exemptions geared toward specific disabilities such as blindness

Veteran exemptions - exemptions for veterans who fought in any wars as part of United States military. In many cases, veterans have to have combat injuries of some kind in order to qualify. Veterans can often get additional exemptions if they also fall under one of the above criteria.

Homestead exemptions - exemptions for spouses of the deceased taxpayer who owned the property they reside in. In some states, these exemptions are applied automatically, while in others, they only apply to properties that have certain value, take up certain amounts of space or some combination of both.Organization-based exemptions - property owned by or leased to certain organizations may be eligible for tax exemptions. This includes religious organizations, community groups, charities and other social organizations. Many states have fairly narrow restrictions on which organizations qualify.