11 Property Tax Exemptions and Breaks You Might Not Know About

You thought your mortgage should stay the same yearly, but property taxes can drive up your monthly payment on your home beyond what you thought you signed up for.

You might think there’s nothing you can do about it, but there are actually many strategies homeowners and potential homebuyers can use to maximize their savings and keep more cash in their wallets. Often, these opportunities to lower property taxes fly under the radar.

Unless you know exactly how to apply for and leverage these benefits, you could continue paying property taxes at the rate set by your state, city, or county — but here’s what you need to know about property tax exemptions and breaks that could help you lower your tax bill this year.

The homestead tax exemption allows homeowners to deduct either the percentage value or cash amount of their primary residence from property taxes. Many exemptions are offered specifically to homeowners of a certain age or status, such as seniors or veterans.

In some states, like Connecticut, veterans can take an additional property tax deduction up to a certain dollar amount.

People can take a property tax deduction depending on their status or life circumstances. In states like Nevada, this could include blind people and surviving spouses. Disabled people may be eligible in other states.

In New Mexico, the head of a household can get a $2,000 deduction on the value of their home for the purposes of property taxes. To qualify, they must be a New Mexico resident.

In states like South Dakota, relief programs help the elderly, disabled, and veterans. These programs may not reduce property taxes, but they can delay them for a period of time.

In Virginia, disabled veterans are offered a break on their property taxes. This real estate tax exemption also applies to the surviving spouses of deceased veterans.

The mortgage interest deduction can be significant. You can deduct interest on up to $750,000 of debt or $375,000 for homeowners married filing separately. These funds must be used towards the purchase or substantial improvement of a primary home or second home.

A mortgage interest tax credit is available to lower-income homeowners who used a qualified Mortgage Credit Certificate to subsidize their primary home purchase. This credit offers them up to 50% of the mortgage interest paid annually. If the credit rate is over 20%, the credit is limited to $2,000.

Installing energy-efficient appliances rewards you with lower energy bills and saves on your tax bill. You’ll get credit for energy-efficient doors, windows, and appliances.

Depending on the purchase category, these are limited to a certain amount, such as up to $2,000 per year, on heat pumps, biomass stoves, or biomass boilers.

You can get a federal tax credit of 30% of the cost of installing an electric vehicle charger up to $1,000. This is in addition to your tax credits for purchasing an electric vehicle.

If you have to make any improvements to your home for medically necessary reasons, such as installing ramps, lowering cabinets, or installing an elevator, you could be eligible for a tax credit. You can deduct those expenses that exceed 7.5% of your adjusted gross income.

While property tax exemptions and breaks can save money, you must check with your local government to see which benefits apply to your city, county, or state. Property taxes can vary wildly from one state to the next, and so can the benefits.

Confirm which you can leverage in your area, and if you’re house hunting, look at these tax exemptions and breaks — they might help you make a smart homeowner money move when it comes down to deciding between one city and the next town over.