What is a principal residence exemption?

A principal residence exemption (PRE) is a legal term in California residential real estate law, which allows taxpayers to exempt from property taxes a portion of the value of their main residence. The exemption is generally based on the assessed value of the home and the amount of time the home has been a primary residence. This exemption is a beneficial tool for homeowners as it reduces the amount of taxes that they need to pay for their home. In California, homeowners are eligible for a PRE when they purchase a home and declare it as their primary residence. They are eligible for the full exemption on their first-$1 million of assessed value and a partial exemption for values above that. The amount of the exemption is determined by the assessed value of the home and the amount of time it has been the primary residence. Generally, the higher the assessed value or the longer the homeowner has owned the home, the greater the exemption. The purpose of the principal residence exemption is to reduce the burden of property taxes on homeowners. It helps to make homeownership more affordable by reducing the amount of taxes they need to pay. The exemption is also beneficial to the economy, as it encourages home ownership and stimulates economic growth.

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What is a principal residence exemption?

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