65+ Homestead Exemption

As an estate planning attorney, it is no surprise that many of my clients are age 65 or older.  What is a surprise is that many of them have no idea that they may qualify to freeze their present Homestead Exemption assessment amount!  This “Assessment Freeze” has been in effect since January 1, 2000 when we amended our Louisiana Constitution.

The amendment states that if you are age 65 or older and have an Adjusted Gross Income (AGI) on your Federal Income Tax Return of $50,000 or less (adjusted to inflation beginning in 2001, which means that in 2015 your AGI must be below $71,562) then you may file to freeze your home’s assessed value permanently!   The “permanent” part was a great recent addition that we, as voters, passed in November of 2002.  Under the prior law, one had to prove the meeting of the AGI requirements annually.  Now, if you qualify for the AGI requirement and receive the assessment freeze – you are permanently qualified!

So, what exactly does an “assessment freeze” mean?  Let’s say in 2003 you buy a home worth $100,000, then it is “assessed” at 10% of the fair market value which comes to 10,000.  Now you take your 7,500 homestead exemption (that is why people believe that we have a “$75,000” homestead exemption because mathematically it would zero out the Parish property taxes on a $75,000 home) and subtract it for a total taxable assessed value of 2,500.  If your millage rate is 175 mills then your property tax would be $437.50 (2,500 x .175 = 437.50).  Now let’s say it is 2010 and your new fair market value of your property is $200,000.  Your new “assessed” value would be 20,000 less the 7,500 homestead exemption, for a taxable assessed value of 12,500 (20,000 less 7,500).  Doing the math, your property taxes would now be $2,187.50 (12,500 x .175 = 2,187.50), a difference of $1,750.00 (2,187.50 less 437.50)!  Had your assessed value been “frozen” at 10,000 you would still be paying the same amount as in 2003 (assuming the millage rate had not increased).

This is an incredible feature for our Senior Citizens who may not have the same amount of disposable income they had when working.  You can apply for this “freeze” by visiting either of Assessor Core’s offices, in Covington or Slidell, or by mail, using the form on the reverse side.  You must bring/send your proof of age and a copy of the first page of your 2006 Federal Income Tax return.

 
 

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Services Include:

- Revocable Living Trusts 
- Wills and Living Wills
- Powers of Attorney
- Successions 
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- Gift Trusts
- Special Needs Trusts 
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- Credit Shelter Trusts
- Family Limited Partnerships/LLC
 
 
 


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Covington, Louisiana 70433-5903
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