Pennsylvania offers real estate tax relief to certain property owners via a homestead exclusion. The homestead exclusion reduces the assessed values of homestead properties, thereby reducing the property tax on these homes. You must apply for the exclusion. It will not be granted to you automatically. The deadline to apply is March 1, so now is the time to take action to reduce your taxes. If you purchased a home, condo or townhome in 2022, this applies to you.
Who is Eligible for the Homestead Exclusion?
Generally, most owner-occupied homes are eligible for property tax reduction. Only a primary residence is eligible for property tax relief.
“Owner” Includes any of the following:
A joint tenant or tenant in common.
A person who is purchasing real property under a contract.
A partial owner.
A person who owns real property as a result of being a beneficiary of a will or trust or as a result of intestate succession.
A person who owns or is purchasing a dwelling on leased land.
A person in possession under a life estate.
A grantor who has placed the real property in a revocable (i.e. “living”) trust.
A unit owner of a condominium
How Much Will I Save?
The homestead exclusion entitles homeowners real property tax relief of up to one half of the median assessed value of homesteads in the taxing jurisdiction (county, school district, city, borough, or township). If the median assessed value of homesteads in a school district is $40,000, for example, the school district may provide for each homestead property an exclusion in tax assessment of up to one-half of that median, or $20,000. The actual exclusion allowed will be set by the school district. All homestead properties in the school district will receive the same size exclusion, which will reduce each taxpayer's school real property tax bill. A homestead property formerly valued for tax purposes at $50,000 would be taxed as if its value were only $30,000 ($50,000 minus the $20,000 exclusion), effectively reducing its school real property tax bill by 40 percent.
How Long does the Exclusion Last?
Once you are approved for the homestead exclusion, you remain approved until you change your residence or sell the property. It does not expire.
Situations Requiring New Homestead Exclusion Application
Property Sales: Once a property that had a homestead exclusion is sold, the exclusion is removed at the end of the year. The new owner must file a new application.
Name Changes: If there is a name change to a deed, you must file a new application. Example: If you transfer your deed to your maiden name (for example following a divorce), the homestead exclusion will be removed at the end of the year.
Irrevocable Trusts: If you transfer your home to an irrevocable trust, you will no longer be eligible for the homestead exclusion.
How to Apply
Homeowners should contact their county assessment office for a copy of their county’s homestead and farmstead application form.
Fiffik Law Group, PC provides a full range of services to residential and commercial property owners, including assessment appeals. Contact our experienced real estate attorneys today.