Primary Residence Coupled With Over 65 Exemption

Hi Prospects & Friends!

When buying a home, majority of us buy the home to live in permanently, and don't bother to make plans on renting our home out. We use this primary home residence on our drivers license, our mail and on all our bills we pay associated with our home, as well as all other bills outside the home. When you first buy your home, you already know if it will be your primary residence or not, and will plan accordingly. Primary residences come with home perks, and the biggest one is your homestead exemption which just means you get a discount on your annual property taxes. The second biggest homestead perk comes for buyers 65 or over, and these buyers are exempt from paying the majority of their annual property taxes, which does have a capped value, so to better understand this particular exemption here is an example;

Mary & Peter buy a home and they're both 68, for the county jurisdiction their home is zoned in they're entitled to the over 65 exemption, because of being 65 or over, and for just homesteading the property (living their with proof of drivers license showing the address). So Mary & Peter are happy and start to analyze their over 65 exemption more in depth. Mary writes down the numbers and discovers;

• Assessed Value- $175,000
• Over 65 Homestead Exemption- $250,000 cap
• Homestead Exemption- 20% (for all the county jurisdictions 5 total for their house) 
• School Exemption - 20% and $40,000 for homestead exemption, and $25,000 for over 65 exemption
• College Jurisdiction- 1%  and $75,000 for over 65 exemption
• Emergency Jurisdiction- 5% and $160,000 for over 65 exemption

Mary immediately informs Peter their over 65 exemption is eliminating a total of 5 taxing jurisdictions, because of each one offering them a $250,000 discount, and this amount is not including the 20% additional homestead discount. Mary & Peter smile and say this is great, because of their assessed value being $175,000 which is lower than the over 65 exemption of $250,000 they will not have to pay any taxes on those 5 particular taxing jurisdictions. The other few taxing jurisdictions that are left, Mary and Peter aren't concerned since those taxing jurisdictions are very minimal amounts they will have to pay annually. Mary then looks at Peter and says "I think we should of gotten a bigger home equal to the over 65 exemption of $250,000 since we would not have to pay taxes on that home either for those 5 particular taxing jurisdictions. Peter then says to Mary, lets just homestead this primary residence for 2 years, in order to claim our up to $500,000 capital gains tax exemption for being a married couple, and we will renovate and flip this home into the home you really want which we will pay up to $250,000. Mary then says, thanks hubby and glad we both understand how the over 65 exemption works. 

So inconclusion, for buyers under 65 you do get the homestead exemption for allowing your home to be your primary residence, and this will save you money on your annual property taxes, so don't ignore filing this exemption. The key here is to know what taxing jurisdictions you're paying before you buy the home whether your over 65 or under 65. Reason for needing to know this, because if you analyze more in depth, you can actually buy a home that will fit in these perks to even benefit you even more, if you know the rules to the capital gains taxes, the over 65 exemptions, and the primary residence rules.