Property Taxes on Owner-Occupied Housing

When you move in, property tax appraisals often "reset" to market value.

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Most property taxes are based on what your house is worth. By that logic, owners of two identical houses should have identical property-tax bills. In practice, state laws have created all kinds of exemptions and tax breaks that disrupt that equality. Many of the tax breaks are tied to whether you live in the house, and for how long you've lived there.

Homestead Exemption

California and Texas are among the states that offer resident homeowners a property tax cut. If your California house is your permanent residence on January 1, you can request the county appraiser shave $7,000 off the value of your home before calculating property tax for the year. Texas offers a $15,000 value reduction affecting property taxes levied by the school district. Texas counties and cities can also offer up to a 20 percent local reduction.

Special Cases

In addition to a basic tax break, some states offer special breaks for special cases. In North Carolina, for example, resident homeowners who are permanently disabled or at least 65 years old can qualify for up to a $25,000 reduction in assessed property values. Disabled veterans can slash values $45,000. The state's "circuit breaker" program allows homeowners who are either seniors or disabled to limit property tax bills based on their annual income.

Time's Impact

Some tax breaks depend on how long you've lived in the house. Florida's Save Our Homes constitutional amendment says if you have a homestead exemption, property values can't go up more than 3 percent a year; if the consumer price index rises less, the increase is less, too. When you buy a house, the property gets reassessed at market value. If you move from one homestead to another within the state, though, you can preserve some of your Save Our Homes savings.

The Homestead Process

Your county's tax assessor website should be able to tell you how to apply for a homestead exemption. In Florida and Texas, for instance, you download forms, fill them out, and send them in to the assessor. If your next tax bill doesn't reflect the breaks for owner-occupied housing, you can file an appeal. Remember that if your neighbor's property taxes are much lower, the assessor may not have made a mistake. Your neighbor may be just be entitled to more breaks than you.