Estimating Tax Savings from Homestead Exemptions and Property Tax Credits

This paper details the methodology used to generate estimates of tax savings from statewide property tax exemption and credit programs in the United States. Estimates for each state are available for 2012 on the Lincoln Institute of Land Policy’s Significant Features of the Property Tax website. For each program, there are estimates of the total amount of tax savings statewide, the share of homeowners that are eligible, the median level of tax relief, and an analysis of how eligibility and tax savings vary across the income distribution. This is the first time that this detailed data is available for most of these programs. The estimates were generated through a simulation exercise that combined information on the key features of each program with microdata from the American Community Survey on household characteristics that determine eligibility and tax savings from exemptions and credits.