Do You Have to Refile a Homestead Deduction When Refinancing?
If you own the home you live in, many states will allow you to claim a homestead exemption on property taxes. Once you file the exemption -- also known as a homeowner exemption -- you can deduct some of your home's worth from the assessed value you pay property taxes on. Depending on your state, you may need to refile your deduction when you refinance.
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Exemptions
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The amount you can claim for a homestead exemption varies between states; As of 2011, California offers $7,000 while Florida's exemption is $50,000. Some states offer added tax breaks for particular residents; Florida offers higher exemptions for widows and blind homeowners, for instance. You can only claim a homestead exemption if the property is your primary residence, you own or co-own it, and you're a state resident. You can't claim an exemption on more than one house.
Filing
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You have to file with your local county government to claim your homestead property-tax exemption. You may be able to do this online, or download forms to submit by mail. Each state sets its own deadlines; Michigan homeowners must file by May 1, California by Feb. 15. If you miss an exemption for a prior tax payment, the consequences vary; Michigan may allow you to claim an exemption on tax payments up to three years ago, but if you neglect to file in California, you can't claim any back exemptions.
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Refiling
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Once you file your exemption, it will usually stay in force until you sell your house or move. If you refinance, you may have to file again, depending on which state you live in. California and Florida, for example, don't require you to refile. Indiana, however, requires you to refile if you refinance and also if you place the property in a living trust. If you fail to refile when you're required to, you'll lose your exemption for that year.
Considerations
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You may have to provide proof of your exemption when you file or refile. This could include personal identification, proof of ownership -- including that you took ownership in time to claim a current year exemption -- and proof that you're a state resident. A voting card or driver's license will usually count as proof of residence. If you move to another state but decide to hold on to your house, you will probably lose your resident homeowner exemption.
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