Homestead Credit

The Homestead Credit is the other type of property tax disaster relief aside from the Local Option Credit and Abatement. It is only available in declared disaster areas.

Basic Requirements

• The credit is only available for "homestead dwellings" 
  • Homestead dwellings are just the house and garage of a homesteaded property
• The property must be homesteaded and be classified as 1a, 1b, or 2a
• Homesteaded manufactured homes qualify
• The homestead dwelling must be within a declared disaster area

There is no minimum damage requirement and no application necessary for the Homestead Credit. Once the Executive Council approves the application to be a declared disaster area, all damaged homestead dwellings should automatically receive a credit.

Buildings may not receive a local option disaster credit in addition to a Homestead Credit. Because the Homestead Credit is automatically applied, we recommend that the county use the Homestead Credit if a property qualifies for both. This does not prohibit the parcel from receiving multiple credits, just the homestead dwellings.

As a credit, the property tax relief is applied in the year following the disaster.

Specific Situations

Here's how the Homestead Credit applies in these specific situations.

If a property is approved for a mid-year homestead before the disaster, any damaged homestead dwellings would be eligible for the Homestead Credit if the property is located in a declared disaster area. Because it would meet the definition of a homestead dwelling at the time of the disaster, it would qualify for the credit. If the property is not homesteaded on the date of the disaster, then it would not be eligible for a Homestead Credit.

If a property is receiving a fractional homestead, it would be eligible for the Homestead Credit fractionalized based on the percent of homestead granted. This is fractionalized in the same manner as the Homestead Market Value Exclusion where the credit is calculated on the full value of the property and then fractionalized on the percent homestead granted.

If an individual structure is used for both residential and non-residential purposes, such as a shop on the first floor and a residence on the second, then the part of the structure classified as a homestead dwelling would be eligible to receive the Homestead Credit.