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Property Tax Exemptions

Basically, all real and personal property is subject to tax unless specifically exempted. Exemptions come in many forms. These exemptions include the property's use (such as property used for religious or charitable purposes) and the form of the property's ownership (such as household goods). Exemptions are used by state and local governments to help attract new businesses or to encourage certain types of development, such as low-income housing or reclamation of historic sites.

Exemptions range from full to partial tax relief. One town may provide a full exemption for personal or business property, whereas another town may provide only a partial exemption for these types of property. The limitations can be expressed in terms of dollar amounts or by a percentage of value. Homeowners' exemptions are an example of this kind of partial exemption. Other forms of exemptions exist for the following:

  • Certain municipal levies
  • County city, town and school purposes
  • Government property (these are required by state law)
  • Persons over age 65
  • Veterans.

An important issue in property tax law deals with the location of property (or its "situs") for tax purposes. If a taxpayer owns property in more than one area -- or if the taxpayer owns property that is moveable, like a car or a trailer -- it can be difficult to determine the most appropriate location from which to determine the property tax on those items. Because the law can be so variable from one place to the next, this issue is often in dispute.

The general rule states that land will be taxed according to the laws of the county where the land is located, regardless of where the owner resides. On the other hand, moveable property is generally taxable according to the laws of the county where the taxpayer resides. These are general rules. For information specific to a certain situation, check with an accountant, tax advisor, or lawyer.

Next Steps
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