Real Estate Tax Abatement Programs

Property tax abatement is a reduction or exemption from property taxes granted by the taxing authority. Because property taxes are local taxes levied through the authority of state legislation, tax abatement programs differ mostly by state. Tax abatement programs are directed at groups of land owners–for example veterans–and classes of property–such as historic landmarks.


As stated by the Lincoln Institute of Land Policy, homeowner exemptions and credits would be the most frequent kind of land tax abatement. The homestead exemption subtracts a specific quantity of assessed property value from taxation for possessions which are owner-occupied. Some states use a tax credit, which can be a subtraction in the taxation itself as opposed to the real estate value, to the same effect. In California, the exemption is used: $7000 is subtracted from the appraised value of land that’s owner-occupied.

Elderly Homeowners

As long ago as 1994,”only a couple of countries provided little or no real estate tax relief to the elderly,” Tracey Seslen of the Massachusetts Institute of Technology Center for Real Estate reported at a 2005 analysis of tax abatement programs. The tendency was growing. Exemptions for the elderly are based, naturally, on age and are sometimes combined with income limitations–that is, the lower the income the lower the taxation. In some programs land taxes for the elderly are frozen and can, in some circumstances, proceed to new places with the property owners if they downsize, as in California. In the others the abatement takes the kind of a tax cap.

Disabled Homeowners

Many nations have property taxes for disabled homeowners or disabled veterans. As with other tax abatement programs, in some countries these amount to limits on taxation and in others it’s a credit against the tax or an exemption of a certain percentage or amount of valuation.

Historic Properties

To foster the preservation of historic buildings, some countries offer a property tax exemption to historic buildings or to properties historic buildings. In California, the Mills Act provides real estate tax relief to owners that restore and maintain their historic structures. The California Office of Historic Preservation cites the Mills Act as”the single most important financial incentive in California for its preservation and restoration of qualified historic buildings.”


So-called”circuit-breakers” use earnings thresholds or sliding scales. In some countries property owners who have incomes below a certain threshold are exempt from a proportion of their property tax bill. In the others the tax bill is based on a sliding scale attached to the house owner’s income.

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