Louisiana Homeowner Tax Advantages

Louisiana Tax Advantages

There are many tax advantages to owning your home in Louisiana. To begin with, Louisiana’s property taxes are low – especially in areas such as Sabine Parishe (around Toledo Bend Lake). But, that’s not all – we also enjoy a homestead exemption law that reduces them to little or nothing. The information below explains how it works.

Basic Homestead Exemption Information

What is the Homestead Exemption? The homestead exemption is a tax exemption on the first $75,000 of the value of a person’s home. The value of your home is exempt up to $75,000 from state and parish property taxes. The exemption applies to all homeowners. If your home is worth $70,000, you are fully exempt from the payment of property taxes. If it is worth $90,000, you are exempt on the first $75,000 of value; and you pay taxes only on the remaining $15,000 of value. If your home is worth $200,000, you are exempt on the first $75,000 of value; and you pay taxes on the remaining $125,000 of value.

When and how do I file for my Homestead Exemption? After you go to your Act of Sale, your attorney or notary will file your act in the Conveyance Office of the Parish Clerk of Court. A short time later you will receive a recorded copy of your title along with the recordation numbers, the Conveyance Office Book and Page number (known as the C.O.B and Folio) and the instrument number. After you receive the recorded copy of your sale, bring it and the C.O.B. and Folio number to the Parish Assessor’s Office and file for your homestead exemption. You must own and occupy the property to qualify for the homestead exemption. The property owner must come into the Assessor’s Office personally to file for the exemption.

Must I file for the Homestead Exemption every year? Initially you must file for the homestead exemption in person. Each year thereafter you will receive a renewal card in the mail. As long as you still own and occupy that same property as your residence, simply return the card to this office, and your homestead exemption will automatically be renewed for the following year. If you sell that property and move to another location, you must again appear in person at the Assessor’s Office to file a new homestead exemption for your new home.

More about the Homestead Exemption and its history…

What is the Homestead Exemption? The original homestead exemption was created many years ago, around 1930. The exemption was only $2,000 off of the full value of a person’s home. It was intended to exempt almost all homes in Louisiana from the payment of property taxes. In 1974, the people of Louisiana adopted a new state constitution which increased the $2,000 homestead exemption to $30,000. In addition, the state legislature was given the authority to increase it to $50,000. The legislature did this in 1975 through legislation sponsored by this office During the late 1970’s, Louisiana experienced record inflation and increases in property values. The $50,000 homestead exemption was not enough to keep pace with that inflation. This is why in 1980 I asked the state legislature to increase the homestead exemption to $75,000, its present level. The voters of Louisiana approved this increase in the exemption in November, 1980. Since that time homes have continued to increase in value. That is why I asked the 1996 Legislature to increase the homestead exemption to $100,000. Without periodic increases in the exemption, inflation will continue to eat away at the worth of the exemption; and inflation will cause homeowner taxes to increase. The legislature, however, has not approved an increase in the homestead exemption. I will continue my efforts to increase the homestead exemption so that inflation will not increase homeowner taxes.

What is the basis of your assessment? The Louisiana Constitution establishes the assessment on your home (and on all other residential property) at 10% of the fair market value of that property. Many times this value is indicated by the sales price of your new home. For example, if you pay $80,000 for your new home, the fair market value is most likely $80,000, and your assessment would be $8,000.

What is the tax rate or millage rate and how is it determined? Most tax rates or millages are voted upon by voters. New tax proposals or renewals of expiring tax rates must be approved by voters themselves. Every time that you vote in favor of a new property tax or new millage proposal, you are voting to raise your property taxes.

Who benefits from the Homestead Exemption? The homestead exemption is the only meaningful, significant tax break that the average citizen has available to him or her. It is the only meaningful tax break which is available to the small business people, most of whom are not eligible for and do not qualify for the industrial tax exemption. If the homestead exemption were eliminated or reduced, these business people would not only continue to pay property taxes on their businesses but they would now also pay additional, higher taxes on their homes. Furthermore, renters would see no real decrease in rents as opponents of the homestead exemption imply. In this parish and throughout Louisiana, homeowners save millions of dollars every year in taxes because of the benefits of the homestead exemption.

Does the Parish receive any funds to support the Homestead Exemption? The homestead exemption is the only property tax exemption in Louisiana that also provides funding and reimbursement for the exemption to local government. Many years ago revenues from the State income tax, the alcoholic beverage tax, and utility taxes were dedicated to funding the homestead exemption. Today, these revenues are a part of the state general fund where $90 million is sent to local government around the state each year to help fund the homestead exemption.

This information is excerpted from the Jefferson Parish (Louisiana) Tax Assessor’s web site at: http://www.gcr1.com/assessor/main.htm