What is Homestead Exemption
Homestead Exemption is a legal regime that protects the value of the homes from creditors and state taxing authorities, and is given to a homeowner upon the assessed value of the home by their parish assessor. There are differences in the exemption as it pertains to property taxes, bankruptcy etc., so always check with a knowledgeable attorney first understand how the exemption applies to your scenario. Louisiana has no State Property tax, instead, property taxes are assessed and charged by the local Parishes and Cities.
Who Qualifies for Homestead Exemption on Property Taxes
In order to qualify for an exemption from property taxes you must own and occupy the property. Only one primary residence per individual or married couple qualifies for the Louisiana Homestead Exemption.
Soon after the Act of Sale on your recently purchase property, your attorney, notary or closing company will file your act of sale in the Conveyance Office of the Parish Clerk of Court. Shortly after filing, you will receive a recorded copy of your title along with the necessary information you will need to bring to your Parish Assessor’s Office and file for your homestead exemption. The property owner must personally file for the exemption at the Assessor’s Office.
Each year following your initial filing for homestead exemption you will receive a renewal card in the mail. Verify the information and return the card if you still own and occupy the property and your homestead exemption will automatically be renewed for the following year. However, if you do not own the property you must return to the Assessor’s Office to file a new homestead exemption for the home you possess. This is often the case for individuals who possess property through a “bond for deed contract” or a “right of habitation or use”. If you purchase another home for your primary residence you must file a new application for the homestead exemption on your new home.
How is it Determined
The parish assessor is given a guideline provided by the Louisiana Constitution for determining the assessment of your home. The assessment is 10% of the fair market value of the property and is limited to $15,000 in value. For example, if you recently purchased your home for $100,000 the fair market value is most likely $100,000, and your assessment would be $10,000. The Louisiana Homestead Exemption exempts the payment of property taxes on the first $75,000 of the homes fair market value ($7,500 off of the assessed value).
For example, if your home is worth $75,000, you are fully exempt from the payment of property taxes. If your home is worth $160,000, you are exempt on the first $75,000 of the homes value, and your property taxes are then calculated on the remaining $85,000 of its value (ie. $8,500 assessed value).
As an illustration, property taxes for Jefferson Parish (WARD-41, TAX CLASS-03) had a millage of .10714. A home valued at $160,000 is assessed at $16,000. Then the homestead exemption of $7,500 reduces the taxable value to $8,500. $8,500 is multiplied by the millage of .10714 to make a total of $910.69 of property taxes.