Homestead Exemptions

Tax Burden Alleviation 

Several types of homestead exemptions have been enacted to reduce the burden of ad valorem taxation for Morgan County homeowners. The exemptions apply to homestead property owned by the taxpayer and occupied as his or her legal residence. Some exceptions to the rule apply and the Tax Assessors' Office can explain them to you.

Applying

To receive the benefit of the homestead exemption, the taxpayer must file an initial application. In Morgan County, the application is filed with the Tax Assessor. Homestead exemptions may be filled at any time during the year. However, exemptions must be filed for by April 1 to apply for the current year. You must still own and occupy the property as of January 1 to be eligible.

Once granted, the homestead exemption is automatically renewed each year and the taxpayer does not have to apply again unless

  • Change of ownership
  • Taxpayer seeks to qualify for a different kind of exemption
  • Your exemption is based on income
  • If you move

Under the authority of the state constitution, several different types of homestead exemptions are provided. In addition, your local government has been authorized to provide for increased exemption amounts. The Tax Assessor's Office can answer questions regarding the standard exemptions as well as any local exemptions that are in place.

Final Rulings on Exemptions

With respect to all of the homestead exemptions, the Board of Assessors makes the final determination as to eligibility; however, if the applicant is denied the taxpayer must be notified and an appeal procedure is available for the taxpayer.

Homestead exemptions must be filed by April 1 to apply to the current tax year.

Local County Exemptions 

The Local County Exemptions supersede the state exemption amount when the local exemption is greater than the state exemption. Morgan County has such exemptions:

Over 65 Exemption

  • Residents 65 years of age or older and otherwise qualifying for homestead exemption can apply to receive an additional in the amount of $10,000 off your 40% assessed value. The additional exemption is for both county and school maintenance and operations taxes. No income limit.
  • Madison Residents 65 years of age or older and otherwise qualifying for homestead exemption can apply to receive an additional in the amount of $10,000 off your 40% assessed value. The additional exemption is for city maintenance and operations taxes. No income limit.
  • Age 65 and Older Exemption from State Ad Valorem Tax - If you qualify for one of the other homestead exemptions listed and are age 65 or older as of January 1, you also qualify for an exemption from the State portion of your ad valorem taxes in an amount equal to 100% of the value of your home and up to 10 acres of land. The value of any additional land or improvements on the same parcel will be granted the standard maximum exemption of the homestead exemption fro which you otherwise qualify.

Standard Homestead Exemption

The Standard Homestead Exemption is available to all homeowners who otherwise qualify by ownership and residency requirements and it is an amount up to $2,000 which is deducted from the 40% assessed value of the homesteaded property. The exemption applies to the maintenance and operation portion of the mill rate levy of the county and the county school system and the state mill rate levy. It does not apply to the portion of the mill rate levied to retire bonded indebtedness or municipalities.

Standard Elderly School Tax Exemption

The Standard Elderly School Tax Homestead Exemption is an increased homestead exemption for homeowners who are 62 years of age by January 1 and the net income of the applicant and spouse does not exceed $10,000 for the preceding year (excluding social security and retirement income). The amount of the exemption is up to $10,000 and applies to school tax including taxes levied to retire bond indebtedness. The amount of the exemption is up to $10,000 deducted from the 40% assessed value of the homestead property. This exemption does not totally exempt the applicant from levied school taxes.

Standard Elderly General Homestead Exemption

The Standard Elderly General Homestead Exemption is available to homeowners who otherwise qualify and who are 65 and older where the net income of the applicant and spouse does not exceed $10,000 for the preceding year. Social Security and certain retirement income are excluded from the calculation of the income threshold. This exemption, which is an amount up to $4,000 deducted from the 40% assessed value of the homesteaded property, applies to the county taxes, school taxes, and the state tax and it does apply to taxes levied to retire bond indebtedness. It does not apply to municipalities. This exemption does not totally exempt the applicant from levied school taxes.

Disabled Veterans Homestead Exemption

The Disabled Veteran Homestead Exemption is available to only 100% Service Connected- Certified Veterans by the Department of Veterans Affairs. At the time of applying, the Veteran must bring in a copy of the DD214 and a Letter from the Veterans Affairs, stating that they are 100%. Upon approval the amount changes every year and the current discount is $109,986 deducted from the Assessed Value of 40% of the Homestead Property.
 
 The un-remarried surviving spouse or minor children of any such disabled veteran shall also be entitled to an exemption as long as the un-remarried surviving spouse or minor children continue to actually occupy the home within Morgan County as a residence and homestead.

Un-remarried Surviving Spouse Exemption

The Un-remarried Surviving Spouse Exemption shall be granted in an amount up to $50,000 deducted from the 40% assessed value of the homesteaded property. This exemption applies to all ad valorem taxes levies if such a person's spouse, who was a member of the armed forces of the United States, was killed or died as a result of any war or armed conflict. Documents from the Secretary of Defense must be provided stating that spousal benefits are received as a result of the death.

Un-remarried Surviving Spouse of a Fire Fighter or Peace Officer

The Un-remarried Surviving Spouse of a Fire Fighter or Peace Officer shall be granted total exemption from all ad valorem taxes levied, if such person's spouse, who as a member of a qualified Fire Department or Peace Officer Agency, was killed or died as a result of injury in the performance of their duty. Documents from the agency must be provided.

Floating or Varying Homestead Exemption

The Floating or Varying Homestead Exemption is an exemption that is available to homeowners 62 years of age or older with gross household incomes of $30,000 or less. The exemption applies to state and county ad valorem taxes but it does not apply to school taxes. The exemption is called a floating exemption because the amount of the exemption increases as the value of the homesteaded property is increased. Since, however, the exemption replaces any other state and county exemption already in place for the property, taxpayers should be very careful in making applications since, in many instances, the granting of the exemption will initially at least increase the amount of taxes levied on the property.

Property Tax Deferral Program

In addition to the various homestead exemptions that are authorized, the law also provides a property tax deferral program whereby qualified homestead property owners 62 years of age or older with a gross household income of $15,000 or less may defer but not be exempt from the payment of ad valorem taxes on a part or all of the homestead property. Generally, the tax would be deferred until the property ownership changes or until such time that the deferred taxes plus interest reach a level of 85% of the fair market value of the property.