The Homestead Exemption in Pennsylvania

Pennsylvania's homestead and farmstead exclusion (under the Taxpayer Relief Act; the deadline is set by Section 341 of Act 72 of 2004) reduces the assessed value of each approved homestead or farmstead by the same amount before school property tax is computed, using property tax reduction allocations the Commonwealth distributes to each school district. Only a primary residence qualifies: a homestead must be used primarily as the domicile of an owner who is a natural person, and a farmstead must be at least ten contiguous acres in commercial agricultural production used as the owner's domicile. Some condominium and cooperative units can qualify. The amount of the exclusion varies by school district and is not guaranteed until funds are available.

The owner files the homestead/farmstead application with the county assessor (county assessment office), which decides whether all or part of the parcel qualifies. Annual reapplication is not required by statute, but a county may adopt a schedule for review or reapplication of approved properties, and school districts must tell homeowners by December 31 if an approval is due to expire. An owner whose property stops qualifying must notify the assessor within 45 days. A false application, or failure to report a change in use, makes the owner liable for the unpaid taxes plus interest and a 10% penalty; knowing fraud is a third-degree misdemeanor with a fine up to $2,500.

Applications are due not later than March 1 of each year to receive the exclusion for school tax years beginning the following July 1 or January 1 (in a city of the first class, the governing body sets the date, no later than December 1 of the prior year). The deadline is set by statute and cannot be extended by executive order.