What is a principal residence exemption?

A principal residence exemption is a legal benefit available to homeowners in New York State that helps to reduce their tax liability. This exemption reduces the amount of taxes that are due on a property by exempting any increases in value due to improvements from taxation. Essentially, the exemption allows a homeowner to pay only the taxes that are due on the original purchase price of their property, even if its value has increased. This exemption applies only to the primary residence of a homeowner, meaning that they must actually use the property as their main residence for the exemption to apply. Other eligibility requirements may include that the homeowner has owned and occupied the property for at least 12 months prior to the date of the exemption application, as well as that they are a full-time resident of New York State. The principal residence exemption can provide substantial tax savings to homeowners in New York State who meet the necessary eligibility requirements. However, it is important to note that this exemption does not apply to any rental income that a homeowner may receive from their property. Furthermore, the exemption does not exempt any capital gains that may result from a sale of the property.

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What is a principal residence exemption?

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