A property tax exemption is a type of special allowance or exemption that property owners may claim when filing annual tax returns. Exemptions of this type must be in compliance with the current regulations and laws connected with the payment of taxes, and the property owners must meet specific criteria in order to receive the exemption. In many nations, there are a number of different types of tax exemptions extended to residential, charitable and business property owners, allowing qualified taxpayers to receive a break on property taxes or even sales taxes that are incurred through the use of those properties.
One of the more common examples of property tax exemption has to do with tax breaks provided to residents who qualify for one or more exemptions. In many nations, veterans of the armed services may qualify for breaks on local property taxes. It is not unusual for residents who are disabled and on fixed incomes to also qualify for some sort of exemption when it comes to paying state and federal taxes associated with properties they own, especially those that serve as the primary residence. There are even examples of exemptions being extended by local and national tax agencies in exchange for agreeing to purchase and maintain property in a designated area.
Charitable organizations are often the recipient of a property tax exemption. The idea here is often to support the agency in the operation of facilities that provide some sort of ongoing service in the community. For example, if a charity owns the real estate and operates a thrift shop or a soup kitchen in an economically depressed area of a major city, there is a good chance that some type of property tax exemption may be provided.
Even businesses may sometimes receive some type of property tax exemption. Local jurisdictions may offer an exemption as an incentive for a company to buy property and build facilities within that jurisdiction, making it possible to create more jobs for the residents of the community. Typically, a company must meet specific qualifications in order to be eligible for a property tax exemption that extends for several years, and must also continue to comply with those qualifications from year to year in order to retain the exemption.
Qualifying for a property tax exemption requires determining if tax agencies currently offer grounds for exemption and if the entity in question meets the criteria necessary to receive one or more exemptions. Since tax laws do change over time and do vary from one jurisdiction to the next, it is important to work with tax professionals and identify if a property tax exemption is in order. If so, then procedures must be followed to claim the exemption, including presentation of proof that the application does meet the current qualifications.
