The best benefit of a homestead exemption for most property owners is the protection from their assessed value increasing more than 10% in a given year. Once you own and prove residency in a home for at least one year on January 1st of the given tax year, your homestead exemption cap will be in effect.
Let’s take a look at an example: John buys his primary home in June 2023. At the time of purchase, his market and assessed values are $450,000. He applies and is approved for his homestead exemption immediately in June 2023. In April of 2024, John received his Notice of Appraisal from the county, and his market and assessed values are $600,000. John is curious why his assessed value increased much more than 10% from the previous year even though he had his homestead exemption approved. This is because taxes are assessed on January 1st, 2024, and John was not the resident owner of the property one year prior on January 1st, 2023. John must continue waiting until 2025 for his homestead cap to kick in. We recommend going ahead and protesting during this critical 2024 “waiting period” to establish the best possible baseline value ahead of 2025.
It is a common misconception that your homestead exemption cap starts right away. With recent changes to property tax law, you can now apply and receive your homestead exemption at any time during the year and benefit from the school tax and other jurisdiction credits. However, the cap protection has a required waiting period. Many homeowners’ taxes increase significantly during this waiting period, due to the reset of the previous homeowners’ exemptions.