Owning a home comes with many benefits, and one of the most rewarding but
often overlooked is the Homestead Exemption. This exemption offers tax relief for homeowners living in their primary residence, providing substantial savings by reducing the property's taxable value. Below, we explore the basics of the Homestead Exemption in
Philadelphia, Montgomery, and Delaware Counties, including eligibility requirements, application steps, and what makes this program an intelligent strategy for reducing property tax expenses.
What is the Homestead Exemption?
The Homestead Exemption is a property tax reduction program available to homeowners who occupy their primary residence year-round. When you qualify, a portion of your property’s assessed value is subtracted before calculating your real estate tax, which means you’re taxed on a lower amount.
Each county carries different exemption amounts and eligibility guidelines, but the main goal is consistent: to ease the tax burden on homeowners who maintain their primary residence. Benefits of the Homestead Exemption include:
- Lower Property Taxes: By reducing your property’s assessed value, your tax bill decreases, resulting in annual savings that accumulate over time.
- Automatic Renewal: Once approved, the exemption typically renews yearly as long as you meet eligibility requirements.
- Applicable to Most Homeowners: Unlike some exemptions that target specific groups, the Homestead Exemption is generally open to most homeowners, with a few exceptions.
How Much Can You Save with the Homestead Exemption?
The amount of savings depends on the county where your property is located, with each possessing its own guidelines. Here’s a snapshot of how it works in Philadelphia, Montgomery County, and Delaware County.
Philadelphia
In Philadelphia, the Homestead Exemption lowers the assessed value of your property by $100,000. The latest adjustments can lead to an annual savings of up to $1,399 on your real estate taxes.
Montgomery County
Montgomery County’s Homestead and Farmstead exclusions offer a $30,000 reduction in assessed value, providing a meaningful decrease in property taxes for qualified homeowners. Additionally, Montgomery County has two related programs, Act 1 and Act 50, which may offer further benefits based on municipal adoption.
Delaware County
In Delaware County, the savings are applied through the school district, which sets the Homestead Exemption’s value. Delaware County residents can see tax relief by applying directly to their school district during open enrollment from December 15 to March 1 each year.
Do You Qualify for the Homestead Exemption?
The eligibility requirements for the Homestead Exemption are generally straightforward, but there are some essential criteria to consider.
Basic Eligibility Criteria
To qualify, you must:
- Own and Occupy: You must own and reside in the home as your primary residence.
- Meet Local Requirements: Each county has specific rules, so check for any additional requirements that may apply.
Special Conditions in Philadelphia
Philadelphia also provides conditional Homestead Exemptions for residents whose names may not be on the deed, which can happen in cases of inheritance, fraudulent deed transfers, or rent-to-own agreements. Conditional exemptions are granted in three-year increments.
Non-Eligible Cases
Homeowners in Philadelphia with a 10-year residential tax abatement are ineligible until the abatement expires. Afterward, you can apply for the exemption to save on property taxes.
How to Apply for the Homestead Exemption
Applying for the Homestead Exemption varies by county. Most applications can be completed online, by phone, or by mail.
Philadelphia
Philadelphia provides three convenient ways to apply:
- Online: Complete the Homestead Exemption application on the city’s tax center website. If the previous owner’s name is still on the title, submit a paper application.
- By Phone: Call the Homestead Hotline at (215) 686-9200 to apply.
- By Mail: Print, complete, and mail the Homestead application to:
City of Philadelphia
Department of Revenue
P.O. Box 52817
Philadelphia, PA 19115
The final deadline to apply is December 1. Apply by September 13 to see the exemption reflected on the following year’s tax bill.
Montgomery County
Montgomery County allows homeowners to apply for both the Act 1 and Act 50 homestead programs with one application. You can obtain the form
online or at the Board of Assessment Appeals office.
- Deadlines: Act 1 applications are due by March 1, while Act 50 applications must be filed by December 15.
- Contact Information: For questions, call the Assessment Office at (610) 278-3761, Monday through Friday, from 8:30 a.m. to 4:15 p.m.
Delaware County
In Delaware County, the local school district manages applications, and the enrollment window runs from December 15 to March 1.
- No Application Fee: Filing for the exemption is free in Delaware County.
- How to Apply: Apply through your school district’s open enrollment period to secure savings on your property taxes.
Why the Homestead Exemption Matters
For homeowners, the Homestead Exemption can significantly reduce the ongoing cost of homeownership by lowering property taxes year after year. By understanding the requirements and taking advantage of your county’s program, you’ll save money and make the most of your investment in your primary residence. The savings can add up over time, providing real, measurable benefits to you and your family.
With tax season approaching, now’s the perfect time to ensure you maximize the benefits of the Homestead Exemption in your county. From Philadelphia to Montgomery and Delaware counties, this program provides valuable relief, making homeownership a little more affordable for residents throughout the area.
