Milton Township
Home Improvement Exemption (HIE)
Homeowners who add an improvement to their property that causes an increase in assessed value can qualify for the Home Improvement Exemption. You must own and occupy your home as your principal residence in order to qualify for the HIE.
The HIE exempts the specific value of the improvement for four years, deducting the specific value of the improvement from the assessment prior to the calculation of the property tax bill. The HIE goes up to a maximum amount of $25,000 of assessed value. For example, if you make an improvement to your home that causes an increase in assessment of $30,000, then the HIE exempts the first $25,000 of the increase for four years, but the remaining $5,000 shows up immediately on your property tax bill.
This maximum also affects multiple HIE's. Even if a property has multiple HIE's running concurrently, the maximum amount that can be deducted from the tax bill in any given year is still only $25,000. For example, let's say a property owner adds an addition one year and receives an HIE for $10,000; he adds a porch the following year and receives an HIE for $2,500; he finishes the basement the year after that and receives an HIE for $15,000. The four-year periods of the HIE's overlap somewhat, meaning that he will at some point have three HIE's with a total exemption value of $27,500. However, because the maximum deduction for all HIE's in any given year is $25,000, he will have only $25,000 deducted from his assessment prior to calculation of the property tax bill, not $27,500.
Note that you do not need to apply for the Home Improvement Exemption; if you own and occupy your home, the HIE is granted automatically for all assessable improvements you make to your home.
- You must own and occupy the property as your principal residence.
- You must have an increase in assessment attributable to an improvement you have made to the property.
- The value of the HIE(s) is limited to a maximum of $25,000 of assessed value.
Requirements: