Property tax breaks in four US markets require living in the home

A Vietnamese family’s US home is taxed each year by counties, cities, school districts and other local bodies.

In the four markets examined here, California, Texas, Florida and New York City, the homeowners’ and homestead exemptions, the city’s co-op and condo abatement and New York State’s STAR benefit apply only where the home is a principal, primary or permanent residence, as do Texas’s and Florida’s tightest caps on yearly rises. A house left empty or let is taxed without them.

Who sends the bill

In the words of Internal Revenue Service Publication 530, “most state and local governments charge an annual tax on the value of real property”.

In California the state has levied no general property tax since 1933, other than on privately owned railroad cars; the county assessor values the home, the county tax collector collects the tax, and counties, cities, schools and special districts depend on the revenue, according to the State Board of Equalization’s guide to the tax.

“Texas has no state property tax,” the Texas Comptroller states; local taxing units set the rates. In Florida the county property appraiser values each property as of 1 January and the county tax collector sends the bill in late October or November. In New York City the City Council sets the rate each year.

None of the federal, state or city texts consulted mentions a federal property tax. This indicates that the yearly tax on a home is state and local only.

The federal income tax deduction for state and local taxes matters only to people who file US returns and itemise their deductions, which non-resident aliens may do only if they have income effectively connected with a US trade or business.

The rules on buying a US home and the withholding when a foreign owner sells, and US estate tax for non-citizens, are covered in separate articles. How the money for the purchase and the yearly bill leaves Vietnam is also outside this article; the evidence chain behind cross-border capital transfers is covered separately.

A family that later moves to the United States, for example through the EB-5 investment route to a conditional green card, faces a factual question in each place: whether the home has become its principal or permanent residence.

California: a 2% cap with no residence condition, a small exemption for residents

Under Proposition 13, approved by voters in 1978, the tax rate is 1% plus the rate needed to service debt that voters have approved, such as bonds for school buildings. A home is reassessed to market value only when it changes ownership or new construction is completed; otherwise its base year value may generally rise by no more than 2% a year.

The Board of Equalization states that cap for real property in general, with no condition about who lives there. This indicates that it protects a non-resident owner as it protects a resident.

The relief that turns on residence is the homeowners’ exemption: US$7,000 off taxable value, if the home was the owner’s principal place of residence on 1 January. “Rentals and vacation homes do not qualify,” the Board’s guide says.

At the 1% base rate, the exemption is worth about US$70 a year before voter-approved debt rates. The US$7,000 of value an empty home forgoes in California is small beside the US$140,000 exempt in Texas and up to about US$50,000 in Florida.

Texas: US$140,000 of value exempt from school tax, for a homestead only

Section 11.13 of the Texas Tax Code exempts US$140,000 of a residence homestead’s appraised value from school district tax, an amount voters approved on 4 November 2025. An owner who is 65 or older or disabled gets a further US$60,000.

A residence homestead is a home “occupied as the individual’s principal residence by an owner”, and the applicant must state that he or she claims no homestead exemption on another home in or outside Texas.

The Comptroller’s example shows what is at stake: a home appraised at US$300,000 that qualifies pays school taxes as if it were worth US$160,000. A home that does not qualify pays school taxes on the full US$300,000.

Once the owner has qualified for the exemption in the preceding and the current year, a homestead’s appraised value may rise by no more than 10% a year, and the Comptroller states that the limit “only applies to a property granted a residence homestead exemption”.

Other real property valued at US$5,320,000 or less in 2026 has a looser 20% cap, the so-called circuit breaker, which takes effect on 1 January of the tax year after the first year in which the owner held the property on 1 January.

The Comptroller’s page on valuation heads this rule “Non-Resident Homestead”. The text under that heading indicates that it means property that is not a residence homestead, wherever its owner lives. Under the statute, current through the Legislature’s 2025 sessions, the circuit breaker expires on 31 December 2026.

Florida: a homestead for permanent residents, a 10% cap for others

Florida’s constitution grants the homestead exemption to a person who holds title and “maintains thereon the permanent residence of the owner” or of a dependant. The Department of Revenue’s guide puts it at up to US$50,000: the first US$25,000 applies to all property taxes, including school taxes; a second US$25,000 applies to assessed value above US$50,000, for non-school taxes only.

That second amount is adjusted upward each year when the consumer price index rises, so the ceiling may now exceed US$50,000; the current figure was not found.

The home must be a permanent residence by 1 January. Eligibility ends if the home is rented or the owner is no longer a permanent resident of Florida.

The statute makes permanent residence a factual determination by the property appraiser, who can weigh evidence such as a declaration of domicile recorded in the county. The application form asks “Are you a US Citizen?” and, if not, for an “Immigration # or Resident Alien Card #”.

Neither the constitution nor section 196.031 of the statutes makes citizenship a condition; the test is therefore permanent residence. Whether a person in the United States on a temporary visa can be a permanent resident for this purpose is not settled by the texts consulted.

A homestead’s assessed value may then rise each year by no more than 3% or the change in the consumer price index, whichever is lower, under the Save Our Homes rule. A residential property of nine units or fewer that is not a homestead has a 10% annual cap instead, and that cap does not apply to school district taxes.

The Legislature has put a constitutional amendment, CS/HJR 1-F, to voters at the 2026 general election. If 60% of those voting approve it, it would take effect on 1 January 2027, cut the cap on non-homestead property from 10% to 5%, and raise the homestead exemption from non-school taxes to up to US$150,000 in 2027 and US$250,000 in 2028 for owners who were permanent residents by 31 December 2026.

Owners who first establish permanent residence from 1 January 2027 would get up to US$50,000 until their fifth year. It is a proposal on the ballot, not law.

New York City: rates by class, an abatement and STAR for residents

New York City sorts homes into tax classes. Class 1 covers most residential property of up to three units and most condominiums of no more than three storeys; co-ops and condos in larger buildings are Class 2.

For tax year 2026, the Department of Finance lists rates of 19.843% for Class 1 and 12.439% for Class 2. Its sample bill indicates that this tax year ran from 1 July 2025 to 30 June 2026. The rate applies to taxable value: assessed value less exemptions.

A Class 1 home is assessed at 6% of market value, and its assessed value may rise by no more than 6% a year or 20% over five years, except for new construction or renovation.

In the Department’s own example, a house with a market value of US$714,000 is assessed at US$42,840; after an exemption of US$2,000 that the example does not identify, the Class 1 rate gives US$8,104 before abatements. The same house with no exemption would owe about US$8,501 before abatements.

Class 2 property is assessed at 45% of market value, and the law requires co-ops and condos to be valued as if they were rental buildings. Increases are capped at 8% a year and 30% over five years for buildings of ten units or fewer, and phased in over five years for larger ones.

These caps are set by tax class. This indicates that none depends on where the owner lives.

The relief that does is the co-op and condo abatement, which cuts a unit’s tax by 17.5% to 28.1% depending on the average assessed value of the residential units in the development. The unit must be the owner’s primary residence and must not be owned by a business such as an LLC.

New York State’s STAR school tax benefit likewise requires the property to be “the primary residence of an eligible owner”; the state weighs factors such as the time spent there each year.

When the bill is not paid

In Texas, taxes unpaid on 1 February are delinquent: the Comptroller lists a 6% penalty and 1% interest on 1 February, the penalty rising by 1% a month to 12% on 1 July, interest at 1% a month with no maximum, and up to 20% more where a taxing unit hires a private attorney to collect.

A lien attaches on 1 January each year, and courts can foreclose and have the property auctioned. Failure to receive a bill does not affect the tax, penalty or interest due.

In Florida, taxes are due by 31 March; on unpaid property the county tax collector sells tax certificates, and two years after 1 April of the year of issue the holder may apply for a tax deed.

California bills are paid in two instalments, due without penalty by 10 December and 10 April. In Los Angeles County, according to its Treasurer and Tax Collector, residential property in default after the final due date, usually 30 June, may be sold once five years have passed without redemption.

What this article has not established

No official text was found stating in terms that there is no federal property tax; the point rests on the absence of any such tax in the federal, state and city texts cited above. California’s constitution was not read directly, because the Legislature’s site blocked automated access; California figures come from the Board of Equalization.

Typical total rates by county or city were not researched, so this article gives no dollar figure for an ordinary bill beyond the official examples. What New York City does when the tax goes unpaid was not researched either.

The current inflation-adjusted amount of Florida’s second US$25,000 was not found, nor was the ballot number of CS/HJR 1-F confirmed from an official source. Whether a non-citizen on a temporary visa can hold a Florida homestead is not settled by the texts read, and case law was not researched.

How much time in a home makes it a principal or permanent residence is a question of fact in each place and was not established.

Whether Texas extends its circuit breaker beyond 2026 depends on the Legislature. The Department of Finance’s page listed only tax year 2026 rates for New York City when it was checked on 10 October 2026.

On the federal deduction, Publication 519 gives a US$10,000 limit for non-resident aliens’ state and local income taxes on effectively connected income, while the Schedule A instructions give a general limit of US$40,000 for 2025. The two have not been reconciled, and no figure is given for non-resident filers.