Homestead exemptions, explained.

At its core, a homestead exemption is a tax break for living in your own home. You tell the state "this is where I live — not a rental, not an investment, not a vacation home," and in exchange the state reduces your property tax liability. The mechanism varies enormously. In Florida it shields a flat dollar amount off your assessed value and caps future growth at 3% a year. In Indiana it knocks off a standard deduction and then a percentage of what remains. In Tennessee — it doesn't exist at the state level at all.

Why this matters so much

For a typical homeowner, the homestead exemption is worth anywhere from a few hundred dollars a year (Illinois, Tennessee relief programs) to several thousand (Texas, Florida for long-term owners). Over a 20-year ownership period, the accumulated savings often exceed $30,000–$50,000. And yet many homeowners — particularly those who bought a home through a casual transaction or who moved in during an unusual closing process — never file the paperwork. The exemption doesn't apply automatically. You have to tell your assessor that this is your primary residence.

Texas: $100,000 off school-district value

Texas expanded its homestead exemption substantially in 2023. The current rules:

• $100,000 exempt from school district taxes. This is the big one — school taxes typically account for about half of a Texas property tax bill, so exempting $100,000 is meaningful. On a $400,000 home, this alone saves approximately $1,200/year.
• Over-65 or disabled: additional $10,000 school exemption, plus a tax freeze that locks your school district tax at the amount owed the year you turn 65. It can't go up as rates or appraisals rise.
• 100% disabled veteran: full exemption — zero property tax on the primary residence. Partial disability ratings get partial exemptions on a sliding scale.

How to apply: File Form 50-114 (Residence Homestead Exemption Application) with your county appraisal district by April 30. You need a Texas driver's license or state ID showing the property address. Once approved, the exemption is permanent — no annual renewal. Major Texas counties we cover: Harris (Houston), Dallas, Tarrant (Fort Worth), Bexar (San Antonio), Travis (Austin).

Florida: $25,000 + $25,000 plus Save Our Homes

Florida's homestead exemption stacks two separate pieces, and it triggers one of the most valuable long-term protections in the country.

• First $25,000: exempt from all property taxes (school, county, city, special districts).
• Second $25,000: exempt from everything except school taxes, and only applies to the portion of assessed value above $50,000. Under Amendment 5 (passed November 2024), this second portion now indexes to CPI — $25,722 for 2025.
• Save Our Homes (SOH): once homestead is established, your assessed value can't increase more than 3% per year (or the CPI, whichever is lower) for as long as you occupy the home. Over time, long-held homesteads develop assessed values far below market value.
• Portability: when you sell a Florida homestead and buy another in Florida within three tax years, you can "port" up to $500,000 of your accumulated SOH savings to the new home.

How to apply: File Form DR-501 with the county property appraiser by March 1 of the tax year you want it to begin. Once granted, the exemption auto-renews annually as long as you still occupy the property. Major Florida counties: Miami-Dade, Broward, Orange (Orlando), Hillsborough (Tampa).

Indiana: $48,000 Standard + 40% Supplemental + 1% cap

Indiana uses a two-part deduction plus a constitutional cap that effectively limits the total bill:

• Standard Deduction: $48,000 off your gross assessed value in 2026 (phasing down to $40,000 in 2027 and zero by 2030 under SEA 1).
• Supplemental Deduction: 40% of whatever remains after the Standard Deduction (rising to 66.7% by 2031 under the same phase-in).
• 1% Circuit Breaker: Indiana's constitution caps total homestead property tax at 1% of gross assessed value. In high-rate cities like Hammond, Gary, and South Bend, most homesteads hit this cap and pay a flat 1%.
• Supplemental Homestead Credit (new 2026): 10% of your tax liability, up to $300/year. Applied automatically.
• Over-65 Credit: up to $150 off your tax bill (income limit: $60k single / $70k joint).

How to apply: File Form HC10 with your county auditor by December 31 of the assessment year. Most real estate closings handle this — verify on your first full tax bill that the Homestead Standard Deduction appears. Major Indiana counties: Marion (Indianapolis), Lake (Hammond, Gary), Hamilton (Carmel).

Illinois: $6,000–$10,000 off EAV, plus senior and veteran add-ons

Illinois exemptions are applied to Equalized Assessed Value (EAV), not the tax bill itself. The dollar value depends on the local composite rate — in an 8% district, a $10,000 EAV reduction saves about $800/year.

• General Homestead Exemption (GHE): $10,000 in Cook County, $8,000 in collar counties (DuPage, Lake, Kane, Will, McHenry), $6,000 elsewhere.
• Senior Citizen Homestead Exemption: additional $8,000 in Cook, $5,000 elsewhere, for homeowners 65+.
• Senior Citizen Assessment Freeze: locks your EAV at the base-year value if you're 65+ with household income under $65,000 (Cook; thresholds vary elsewhere). Renew annually.
• Veterans with Disabilities (SHEVD): tiered EAV reduction — $2,500 (30–49%), $5,000 (50–69%), or all EAV up to $250,000 (70%+).

How to apply: In Cook County, apply online with the Cook County Assessor's Office — the GHE generally auto-renews after initial approval. In other counties, file the equivalent PTAX form with your chief county assessment officer. Major Illinois counties: Cook (Chicago), DuPage (Naperville), Lake (Waukegan).

Tennessee: No state homestead — but narrow relief programs

Tennessee is one of the rare states with no general homestead exemption at the state level. Every primary residence is taxed on 25% of its appraised value at the full combined county + city rate. That said, the state runs targeted relief programs funded by state reimbursement:

• Elderly/Disabled Tax Relief: homeowners 65+ or totally and permanently disabled, with household income under $35,690 (2025), receive state reimbursement on the first $30,900 of market value. Typical credit: $100–$200.
• Disabled Veteran Tax Relief: state pays property tax on up to $175,000 of market value for veterans with 100% service-connected disabilities. Surviving unmarried spouses qualify too.
• Property Tax Freeze: some counties offer a freeze at base-year tax amount for seniors under income limits. Not all counties participate — check with your county trustee.

How to apply: All relief programs are administered by the county trustee's office. Apply between the date your tax notice is mailed and the delinquency date. Major Tennessee counties: Davidson (Nashville), Shelby (Memphis), Knox (Knoxville).

Arizona: Classification, rebate, cap — no traditional exemption

Arizona doesn't reduce your taxable base with a dollar-amount exemption. Instead, homeowner protections come through the property classification system and an automatic rebate:

• Class 3 (Primary Residence) classification: the 10% assessment ratio (vs. higher ratios for rental or commercial) is itself a massive tax reduction compared to what other property types pay.
• Homeowner Rebate: the state automatically rebates 40% of your primary school district tax, capped at $600/year. No application needed as long as your property is classified as Class 3.
• 1% Primary Property Tax Cap: constitutional limit on primary property tax at 1% of Limited Property Value (LPV). If calculated tax exceeds this, the state makes up the difference.
• Prop 117 LPV Cap: LPV can't grow more than 5% per year, so even in rapidly appreciating markets your tax base stays contained.
• Senior Property Valuation Protection (Senior Freeze): available for homeowners 65+ with income under ~$48,000 (single) / $60,000 (couple). Freezes LPV at current value. Renew annually.

How to apply: Ensure your property is correctly classified as Class 3 with the county assessor. If you convert a rental to a primary residence (or vice versa), file the Property Classification Affidavit. Major Arizona counties: Maricopa (Phoenix), Pima (Tucson), Pinal.

A practical checklist

If you're a homeowner who hasn't thought about exemptions in a while, here's what to verify this week:

1. Pull up your most recent property tax bill. Look for a line showing the homestead exemption, deduction, or credit applied. Is it there?
2. If not, check with your appraisal district or assessor whether your property is registered as a primary residence / homestead.
3. If you're 65 or older, confirm the senior exemption is also applied (it's often separate from the regular homestead).
4. If you're a veteran with a service-connected disability, check whether the veteran exemption (sometimes called the Disabled Veterans' Exemption) is on your account.
5. If you've moved within the last year, confirm the new property's homestead is in place — Florida and Texas require re-filing after any move.

A single missed exemption often represents more money per year than what most people spend filing their income tax. It's worth an hour.

Related: Property tax caps explained (Save Our Homes, Prop 117, circuit breakers) · How to appeal your property tax assessment · Compare two counties side-by-side.