What is the Homestead Exclusion?
The Taxpayer Relief Act of 2006 provides for property tax reduction allocations to be distributed by the Commonwealth to each school district through a homestead exclusion.
The homestead exemption allows you to save on property taxes by allowing you to exclude a portion of your home's value from assessment.
What are the homestead exclusion amounts for North Penn School District and Towamencin Township?
The North Penn School Board approved a resolution, effective July 1, 2016, setting the maximum real estate assessed value reduction of $8,439 for Montgomery County residents, and $1,532 for Bucks County residents.
Towamencin Township supervisors approved a reduction of $45,000 for taxpayers in 2016, equating to a savings of $171.36.
How do I determine taxes using the district millage rate of 24.189?
Take the assessed value of the property, divide it by 1,000 and multiply it by the millage rate. The total is the amount of taxes due for the property.
How is the exclusion calculated?
Take the allotted district exclusion reduction amount of $8,439, multiply it by 24.189, divide by 1,000, which totals $204.13. Then, subtract $204.13 from the original assessment (calculated using the above formula), to find the new net school tax amount.
Thus, every property owner under North Penn School District in Montgomery County saves $204.13 off his or her tax bill.
So, a homeowner with an original parcel assessment of $119,400 is paying $2,888.17 in school tax before the exclusion. After the exclusion is applied, the new tax equates to $2,684.04.
Under the homestead exclusion, the assessed value of each homestead is reduced by the amount of the exclusion before the property tax is computed.
Who is eligible for the homestead exclusion?
Property owners must prove that the property in Towamencin Township is the primary residence. Commercial and rental properties do not qualify for the program.
To take part in the Homestead Exclusion, property owners must register with Montgomery County by Dec. 15 for the next tax year.
Do I need to re-apply for the exclusion every year?
No. The property remains in the Homestead Exclusion program unless its status changes, such as through a sale or if it becomes a rental property. The new owner would then have to re-apply to the program.
What about farmstead exclusion?
Please contact the tax office for more details on the farmstead exclusion.
Did You Know?
From 2002 to 2014, the Homestead Exclusion amount in Towamencin Township was $59,000.
It was reduced to $45,000 in 2015, and remains as such for 2017.