Do You Qualify for a Pro-Rated Exemption?

PRO-RATED HOMESTEAD 

EXEMPTIONS

Starting January 1, 2022, state law allows property owners to claim a pro-rated general residence homestead exemption on a property that becomes their principal residence at any point in the year. Previously, property owners could only claim this exemption if they owned and lived in the home as of January 1. 

To qualify for a pro-rated exemption: 

The property owner must own and live in the home. 

A property owner must use the property as their principal residence. 

The property must have been purchased on or after January 1, 2022

Properties purchased prior to January 1, 2022 are not eligible. Property owners who purchased their homes prior to that date must still meet the January 1 standard to be eligible for an exemption in tax years prior to 2022. 

The property cannot already have a general residence homestead exemption for the year. 

If the previous owner has already claimed the general residence homestead exemption for the year on the property, the new owner will not be able to claim the exemption that year. 

Example: Beth has a general residence homestead exemption on her home. In February 2022, she sells her home to Mary. Mary files for a pro-rated homestead exemption but is denied and told she will not be eligible for that exemption until 2023. 

The 2022 property tax bill will still be calculated using Beth’s exemption status so Mary will still benefit from a lower tax bill.  She can apply for her own exemption on the property in 2023. 

The property owner cannot already be claiming a general residence homestead exemption for the year on another property. State law does not allow a property owner to claim a homestead exemption on more than one property in a tax year. 

State law also does not allow property owners to transfer general residence homestead exemptions to another property. (Over 65 and disabled persons exemptions can be transferred, if removed from previous property for that tax year.)

Example: Bob owns his home and claims a general residence homestead exemption. In March 2022, he buys and moves into a new home. 

He files for a pro-rated homestead exemption but is denied and told he will not be eligible for that exemption on his new home until 2023. 

The 2022 property tax bill for his original home will still be calculated using his exemption status and benefit from a lower tax bill. He can apply for an exemption on his new home in 2023.

For more information contact the

Montgomery Central Appraisal District

Exemption Department

936-756-3354