Wednesday Wisdom - Homestead Exemption12/6/2017
After more than 21 years as a licensed agent, I've amassed a wealth of knowledge that I have always been happy to share. Agents and clients often call with questions and I am glad to answer the ones I can, and point them in the right direction for any I can not answer. To that end, I've decides to start a weekly knowledge share.
This week, since we are nearing the end of the year, I will talk about Homestead exemption. In Mississippi, you get a discount, or exemption from the full property tax on your primary residence. This is the place you call home, have your car tags titled to, etc. Your eligibility to claim Homestead exemption is based, in part, on you both owning and occupying this primary residence on December 31st. If you own and occupy on December 31st of the current year, then beginning January 1 - March 31 you can go to your county Tax Assessor's Office and file for Homestead Exemption. Be sure and visit the website of, or call, your tax assessor to find out what information you will need with you when you go to file. Once you file, you don't need to file again in subsequent years, unless there is a change in your status. If you marry, divorce, or lose a spouse to death in the current year, then in January you will need to go and file again due to the change in occupancy. Also, once you celebrate 65 glorious years of life, you can go the following January and file for your Over 65 Exemption. There may be other exemptions as well if you qualify such as disabled so be sure and contact your tax assessor, or visit their website to see what benefits you may be eligible to receive.
Now, for the challenge - you are purchasing a property and all set to close on December 30th and plan move in right away. The sellers moved months ago and have a new home in another state. If your closing is delayed until after January 1st, you will not have Homestead Exemption next year and the property taxes will be significantly higher. Make sure your agent informs your lender and the closing attorney of the vacancy so that taxes can be correctly pro-rated at closing, your monthly payment can be adjusted accordingly, and you are not surprised with an escrow deficiency and an increased mortgage payment the following year to make up for that deficiency. If this is not corrected before closing, recovering the appropriate credit from the seller later may prove challenging, maybe even impossible.
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