Homestead Exemption

Posted on January 23, 2008 by Nancy Liu | Category: Real Estate

Here I would like to share a little knowledge that might save you big bucks in the future.

I always like to remind homebuyers to apply for the homestead exemption at the end of the closing.  I vividly remember at one closing, while I was talking to the buyer about this, the seller was astonished.  The seller asked me: “This is too good to be true! Why didn’t anyone tell me about this when I was purchasing my house?” Missing a small detail resulted in his paying several thousand dollars extra in taxes during the past five years! I realized the importance of sharing legal knowledge with my clients, even though some of it is “common” knowledge.  Remembering to apply for the homestead exemption after you purchase your house will save you several hundred dollars each year.

Under Georgia law, if you own the property as your primary residence, you are eligible to apply for the homestead exemption with the local County Tax Commissioner’s office where the property is located.  There is no limitation on age or income. You may apply for your homestead exemption immediately after receiving your recorded Warranty Deed from the closing attorney but before March 1st of the following year.  Once your application is approved, you will receive a property-tax deduction beginning the first year after you bought the property and continuing thereafter.  However, if you miss the March 1st deadline, you will have to wait until the next year to receive your benefit.  For example, if you bought a house in June 2007, and filed your application before March 1, 2008, you will start to receive the tax deduction benefit on your 2008 tax bill.  Only your PRIMARY residential property is eligible for an exemption.  Commercial or investment properties are not eligible..  However, if you left your primary residence due to medical or other reasons, you are still eligible for the homestead exemption. Homeowners must file the homestead exemption application by themselves. Neither his/her closing attorney, nor the mortgage company or mortgage bank, may file the application for the homeowner.

Once your homestead exemption application is approved, you can benefit from exemption as long as you own the property. The homestead exemption is not transferable. There are basic exemptions and special exemptions. Special exemptions are available for citizens who are 1) 65 years of age or older, 2) disabled, 3) disabled veterans, or 4) 62 years of age or older with low income. Each county has different qualifications and restrictions on the homestead exemption.

Once the exemption has been granted, the county will reduce your property tax by reducing the assessed value of your house each year.  In Fulton, Cobb, Gwinnett and DeKalb counties, the exemption amount is about $10,000 to $15,000 off the assessed value of the residence.

The homestead exemption application is available at your local county tax commissioner’s office or on its website.  You may choose to file the application by mail, E-mail or in person. If you have any questions or concerns, you may contact your local County Tax Commissioner’s Office

This article is only for your reference. Please do not apply mechanically to any exact cases. You are welcome to consult our attorneys at Liu & Associates, P.C. For contact information, please click here.