Homestead exemption
A state law that reduces property taxes on a primary residence, or protects some equity from creditors. Rules and amounts vary a lot by state.
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Free to set up. No credit card.Part 1 of 4
Why a seller cares
The exemption lowers the tax bill on the home you live in, and it ends when you sell. The buyer applies for their own; the proration at closing usually uses the bill as it stands, exemption included.
Part 2 of 4
A simple example
Your taxes are $3,200 a year with the homestead exemption and would be $4,100 without it. The buyer's lender estimates their escrow at the higher figure.
| The moment | What the exemption does |
|---|---|
| While you own and live there | Lowers your bill |
| At closing | The proration usually follows the current bill |
| After the sale | The buyer files for their own; until then the county bills the full amount |
The exemption is yours, not the house's. It leaves with you.
Part 3 of 4
What people get wrong
That the buyer inherits your exemption. They apply for their own, and a listing that quotes your exempt tax bill can surprise them.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
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