What Is A Non-Homestead Credit?
Many real estate contracts in this area have a provision in the contract that the seller will give the buyer a non-homestead credit, if homestead is not in place on residential property as of January 1 of the current tax year. A non-homestead seller credit is a credit given to the buyer by the seller for the difference between the homestead tax rate and the non-homestead tax rate. When this occurs, Settlement Agents typically determine if the property is eligible for homestead. If the property is not eligible for homestead, the tax rate for the property is determined with homestead and without homestead.The homestead rate is subtracted from the non-homestead rate, and the seller gives the purchaser a lump sum credit for the difference for the entire year. The settlement agent then pro-rates taxes between the buyer and seller as of the date of closing at the homestead tax rate.
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