Understanding

Homestead/Farmstead Exclusion

The Taxpayer Relief Act, Act of Special Session 1 of 2006, was signed into law on June 27, 2006.  The Taxpayer Relief Act provides for property tax reduction allocations to be distributed by the Commonwealth to each school district.  Property tax reduction will be through a “homestead/farmstead exclusion.” Generally, most owner occupied homes and farms are eligible for property tax reduction.  Only a primary residence is eligible for property tax relief.

The definition of a homestead is defined as a dwelling, including the parcel of land on which the dwelling is located and the other improvements located on the parcel. To qualify for a homestead/farmstead exclusion you must own the property and reside there full-time.  Rental properties are not eligible.  You may only claim one homestead exclusion.

Each year in November, the Lycoming County Assessment Office handles a mass mailing to properties owners who have recently purchased a property. Our office does not accept homestead applications until November. The deadline to file a homestead application is March 1^st.  If you have already applied for the homestead/farmstead relief in previous years and are still approved, you do not need to re-apply again.  The only time a homestead is removed is if the property has been sold, the mailing address was changed, or the owner requests the homestead to be removed. 

All applications submitted are reviewed by the Lycoming County Assessment Office. Below are some examples of homesteads that could be approved:

1. Duplex – Primary owner of record occupying one side of the dwelling as their primary residence receives a 50% exemption
2. Commercial Business – Primary owner of record occupying a portion of building as their primary residence, percentage of exemption is determined by what is submitted by the owner after review of the Assessment Office
3. Townhouses – Primary owner of record occupying the dwelling receives a full exemption
4. Mobile Homes – Primary owner of record occupying the mobile home in a mobile home park receives a full exemption
5. Property is deeded to a Trust, the trust agreement must be recorded to receive a full or partial exemption depending on the type of property
6. Single Family House – Primary owner of record occupying the dwelling receives a full exemption
7. Article of Agreement – Primary owner of record must occupy the dwelling and agreement must be recorded in the Register & Recorders Office

Who can apply for property tax relief?

District residents who live in owner occupied properties can apply for property tax relief.  Relief is not applicable for rental properties or business properties unless owner occupied.

Why is it necessary to apply?

Property tax relief for owners of homesteads or farmsteads will not come automatically.  The owners must apply to have their property designated as homesteads or farmsteads and be approved – in order to qualify.

How and when must property owners apply?

The school district is required to send all district residents an application along with instructions and a notice of the submission deadline.  The application must be submitted to the county assessor by March 1.  All school districts in Lycoming County have the Lycoming County Assessment Office handle the mailings of the applications.

How will property owners know when applications are approved?

Within 30 days of receipt of the application, the county assessor will mail a notice indicating whether or not the application has been approved.  The county assessor will notify any property owner previously approved for a homestead/farmstead exclusion on the need to re-apply.

Is there a fee to apply?

No, there is no fee for the filing or review of the application.

If an application is approved, when will property taxes be reduced?

You would see the homestead exclusion on your school tax bill the following year.

If an application is denied, is it possible to appeal?

Yes, Property owners who disagree with the decision of the assessor may appeal to the board for a review of the decision.  Appeal must pertain to application filing, deadline, reapplication or the definition of a property as “homestead property” or “farmstead property.”

How exactly will the reductions work on tax statements?

All eligible and qualified property owners in the district will receive a credit known as a homestead/farmstead exclusion.  The exclusion will show up on a tax bill as a separate line item under the original assessed value of the property.  The exclusion will then be subtracted from the original value to produce a new net assessment.

To compute these taxes due, the district millage, or tax rate, will be applied to the new, reduced value of a property.  Therefore, the actual property tax reduction will be the difference between the tax rate applied to the new reduced assessment and the tax rate applied to the unreduced assessment.