When you hear the word "homestead" you probably picture a small farm or a simple cabin, but today most people think of a tax break that protects their primary home. The big question on everybody’s mind is: Can I still homestead in the US? The short answer is yes - the homestead exemption still exists, but the rules vary wildly from state to state and have tightened in some places since the 2020 tax reforms.
What Exactly Is a Homestead Exemption?
Homestead exemption is a state‑level property‑tax relief program that reduces the taxable value of a homeowner’s primary residence. It’s designed to protect owners from losing their home to high tax bills or creditors, and most states also tie the exemption to a residency requirement.
Because it’s a state program, the Tax Code you’ll deal with is largely the one your state’s Department of Revenue or Comptroller publishes, not the federal Internal Revenue Service (IRS). However, the federal government does recognize the exemption for certain tax‑deduction calculations, so it’s a good idea to understand both sides.
How the Federal Landscape Affects Homesteading
The federal government doesn’t directly offer a homestead exemption for property tax, but it does provide the Homestead Credit for low‑income seniors and disabled veterans in some programs. More importantly, the IRS allows you to deduct mortgage interest on your primary residence, which can be combined with a state homestead exemption for extra savings.
Since the 2021 Tax Cuts and Jobs Act, the standard deduction rose to $13,850 for single filers (2025‑adjusted to $14,300). This makes the mortgage‑interest deduction less critical for many, pushing the homestead exemption into the spotlight as the primary property‑tax relief tool.
State‑by‑State Eligibility - What You Need to Know
Every state sets its own exemption amount, residency test, and filing deadline. Below is a snapshot of the most common criteria across a handful of states that illustrate the range you might encounter.
| State | Maximum Exemption | Residency Requirement | Application Deadline |
|---|---|---|---|
| Florida | $50,000 | Owner must occupy the property as primary residence | March 1 |
| Texas | $25,000 (rural $100,000) | Residence must be owned and occupied for at least 6 months | April 30 |
| California | $7,000 (property tax) + $7,000 (income tax) | Owner must live in the home and file a declaration | April 15 |
| New York | $100,000 (School Tax) + $3,000 (city/town) | Owner must occupy the home for at least 180 days per year | January 31 |
| Illinois | $5,000 - $10,000 (county dependent) | Owner must claim the property as primary residence | January 1 |
Notice the big differences: Florida offers a flat $50,000 credit, while California splits it between property and income tax. Texas caps the exemption at $25,000 unless you own land classified as agricultural.
Steps to Claim Your Homestead Exemption
- Confirm Primary Residence Status: Gather utility bills, driver’s license, and voter‑registration cards that show the address.
- Check State‑Specific Deadlines: Missing the deadline usually means you wait another year.
- Complete the Application Form: Most states provide a PDF or online portal through the county assessor’s office.
- Submit Proof of Ownership: Provide the deed, mortgage statement, or property tax bill.
- File Any Required Affidavits: Some states ask for a sworn statement that the home is your primary dwelling.
- Follow Up: A confirmation letter or updated tax bill should arrive within 30‑60 days.
If you move after claiming the exemption, most states let you transfer it within a limited window (usually 30‑90 days) by filing a change‑of‑residence form.
Common Pitfalls and How to Avoid Them
- Assuming Federal Coverage: The exemption is not a federal program. Only state and local authorities administer it.
- Missing the Deadline: Deadlines aren’t flexible. Mark the date on your calendar the year you buy the house.
- Using a Second Home: A vacation property can’t claim the exemption unless you truly move in and make it your primary residence.
- Overlooking County Variations: In Texas and Illinois, counties may add extra credits on top of the state amount.
- Failing to Re‑apply After a Sale: The exemption does not automatically transfer to a new owner. The buyer must apply anew.
Alternatives When the Homestead Exemption Doesn’t Fit
If your state caps the exemption low or you don’t meet residency rules, there are other programs worth checking:
- Senior Citizen Property Tax Deferral - many states let seniors defer taxes until the home is sold.
- Veterans’ Benefits - veteran owners may qualify for additional credits or exemptions.
- Agricultural Use Valuation - rural owners can sometimes rate their land at “agricultural value,” vastly reducing taxes.
- Energy‑Efficiency Rebates - installing solar panels or high‑efficiency windows may earn local tax credits that stack with homestead exemptions.
Quick Checklist - Is Your Property Eligible?
- Do you own the property outright or have a mortgage?
- Is the home your primary residence (you live there >6 months a year)?
- Do you have a valid driver’s license and voter registration at that address?
- Have you filed the state’s homestead form before the deadline?
- Is the property located in a county that offers additional credits?
If you answered “yes” to all of these, you’re in a good spot to claim the exemption.
Frequently Asked Questions
Can a non‑U.S. citizen claim a homestead exemption?
Yes, as long as the person legally resides in the U.S. and meets the state’s primary‑residence criteria. Some states require a Social Security number, while others accept an Individual Taxpayer Identification Number (ITIN).
Do I lose the exemption if I rent out a room?
Usually not, provided the home remains your primary residence and you occupy at least half of it. However, a few states-like New York-require you to keep the occupied portion at least 50% of the total square footage.
What happens if I move to a new state?
You must re‑apply in the new state because the exemption doesn’t follow the homeowner. Most states let you cancel the old exemption within 30 days of moving.
Is the homestead exemption refundable?
Generally no. It reduces the tax bill you owe, but you cannot claim a cash refund if the exemption exceeds your tax liability.
Can I claim the exemption on more than one property?
Only one property at a time can qualify as your primary residence. Some states allow a secondary “farm” exemption, but that’s a separate program altogether.
Bottom Line - Yes, You Can Still Homestead, But Do It Right
The homestead exemption remains a powerful tool for cutting property taxes, but it’s far from a one‑size‑fits‑all. Pin down your state’s specific rules, meet the residency test, and file before the deadline. If you stay organized, you’ll keep more money in your pocket and protect your home from unexpected tax hikes.
