Homestead credit is a tax credit for homeowners designed to lessen the amount of property tax they pay. The total amount of credit a homeowner is eligible for is based on a few factors, and the maximum amount they can be granted greatly varies by state.
Qualifications for Homestead Credit
In some states, such as Iowa, the qualifications needed to be granted a homestead credit are minimal. In the state of Iowa, homestead credit is generally based on the first $4,850 of the home’s Net Taxable value, and to qualify for the credit, homeowners must:
- Declare residency in Iowa
- Occupy the residence for at least six months of the year
- Claim the property as their primary residence (as opposed to a second home)
- Apply for homestead credit by July 1
If you miss the July 1 deadline, your credit will be applied to the following year when your property taxes are re-calculated. In most states, once you are granted homestead credit, you do not need to re-apply for successive years.
It’s important to note that many states do not share the same minimal requirements for homestead credit. In addition to the qualifications required by the state of Iowa, many states also require homeowners to:
- Have low to moderate incomes
- Be over the age of 65
- Be retired or disabled
Different Types of Homestead Credit Exemptions
Most states offer different types of homestead credit, and you may qualify for one or several exemptions. Be sure to check your state’s regulations on which exemptions you can claim together, and how many you can apply for at once.
Additional exemptions are commonly available to:
- Military veterans
- Mobile home owners
- Wildlife properties
- Prairie/wetlands properties
- Areas dedicated to urban revitalization
- Religious, educational, and charitable properties
Check Your State or County Homestead Credit Regulations
Since homestead credit regulations vary greatly among states and even counties, it’s important to research your local regulations regarding who qualifies for homestead credit and what the maximum credit is.
If you have additional questions about Iowa homestead credit options, don’t hesitate to contact us.