Taxes might seem like they drastically cut your income, but property taxes are a worthy cause. These payments go to keep up your community and local government. In Nebraska, property taxes pay for community centers, law enforcement, libraries, roads, and schools. Since you own a building in a specific location, you’re paying for the communal resources.
The government calculates property tax by multiplying the assessed value of real estate times the standard tax rate. In Nebraska, the government taxes property, including land, buildings, mobile homes, and improvements to these assets.
Some people can’t afford real property tax. There are also different regulations regarding the capital gains tax in Nebraska. Find out what property tax exemptions you can file for in Nebraska and how to find out if you qualify.
An Overview of Nebraska Property Taxes
Nebraska property taxes vary depending on the location and property value. Every house in a region will pay the same tax rate according to the county treasurer, with the average property tax rate falling at 1.61%. The tax amount a homeowner owes depends on the house’s value.
For example, every homeowner in one county will pay a tax rate of 1.61%, which is Nebraska’s property tax percentage. However, someone with a house valued at $100,000 will pay $1,610, while someone with a million-dollar place will pay $16,100. Cash home buyers in Nebraska will notice that they still owe property taxes on that first year of ownership.
Only local municipalities can tax property—laws prohibited the state of Nebraska from levying this tax in 1966. The process takes a year to assess, equalize, appeal, and levy property taxes, with a January 1st property assessment date and a tax due date of December 31st. However, every county in Nebraska acknowledges specific property tax exemptions.
Government property used for public purposes is exempt from tax, as are nonprofit organizations. Any property used for charitable, educational, or religious grounds, along with cemeteries, can apply for exemptions.
Since the Nebraska Department of Revenue doesn’t control this factor, property taxes vary by county, ranging from less than 1% in some areas to over 2% in others. Therefore, Nebraska property tax exemptions also vary in amount. Depending on your eligibility, you can get a discount anywhere from 10% to 100% off your annual property tax bill.
Nebraska Tax Laws
The state doesn’t apply property tax to intangible goods, like farm inventory, livestock, or household goods. Some personal property is taxable if it produces income, and these laws have few exemptions.
Nebraska has steep property taxes, but the other taxes are lower than many states. The state sales tax is 5.50%, and local sales taxes can only add an extra 2.50% to each purchase. On average, Nebraska’s sales tax is 6.94%.
The ability of each county to set its sales tax rate closely resembles its power to impose property taxes. If you’re moving across county lines in Nebraska, it’s worth looking at sales and property tax rates before making your choice.
As with Nebraska property tax exemptions, nonprofits can get sales tax exemption forms to keep their expenses manageable. Certain businesses and organizations also don’t need to charge sales tax, which impacts what they pay to the state.
About 55% of property taxes fund public schools in Nebraska. The average tax income funding schools in other Midwestern states is 35%, so Nebraska stands out in this category.
The greenbelt provision allows agricultural land to retain 75% of its assessed value if it would be worth more for other uses. This law means taxpayers using property in Nebraska for farming, agriculture, horticulture, and livestock purposes won’t pay taxes on the total assessed value of the land. While not specifically an exemption, it’s a special valuation for property taxes.
Nebraska residents file state income taxes and federal income tax returns annually. You can file for free online using the state’s NebFile platform. The service’s information guide also helps you find credits for school district property taxes, participating in the School Readiness Tax Credit Act, or purchasing a home in a blighted area.
While these aren’t property tax exemptions, this type of tax relief program can benefit you when you file. Read on to learn more about state-specific Nebraska property tax exemptions.
Nebraska Property Tax Exemptions
Some property owners, such as nonprofits, religious entities, and government buildings, are exempt from taxes. It’s also possible to get exemptions in any state if you meet one of the following criteria:
- Low-income individuals and families
- Senior citizens
- School Tax Relief participants
The specific requirements vary according to your state and local government. Nebraska property tax exemptions clearly outline what properties qualify. The list includes:
- A portion of the property owned by anyone over 65 years old, disabled, disabled veterans, and the living spouses after the veteran’s death
- Mobile homes owned by disabled or blind veterans
- Increased values in property due to renovations and rehabs to restore historical landmarks
- Increased values in property due to planting trees on government areas like the sides of the highway
Low-income residents can file a Nebraska homestead exemption application depending on their income bracket. For 100% relief from property taxes, the following income limits apply:
- An individual older than 65 can’t make more than $29,801
- A married couple over 65 can’t make more than $35,101
- A disabled individual can’t make over $33,601
- A disabled couple can’t earn over $38,501
You may be eligible for 90% or less property tax relief if your household income exceeds the above limits. If senior citizens earn over $45,101 single or $53,601 as a couple, they can’t get any relief. Qualified disabled individuals can’t make over $49,001, and couples can’t earn over $57,201. If you bring in more income than those limits, you won’t get any property tax relief.
If your house is worth more than a certain amount, you might not be able to get an exemption. This issue occurs when the maximum value is so high the municipality needs that taxable income to provide community resources and services.
How to Find Out if You’re Exempt From Property Taxes
You can check your eligibility for exemption from the Nebraska county assessor’s office. Reading the frequently asked questions gives you an idea of property taxation timelines and calculations. You can also see what people are most likely to earn an exemption.
If you’re eligible for property tax exemption, you can apply through the tax incentive program. The relevant county board of equalization reviews applications. Your provision lasts for four years, at which time you need to reapply. Earning the exemption once doesn’t mean you’ll always qualify since local municipality regulations may change over time.
You can’t reapply for the homestead exemption program if the county assessor rejects your most recent appeal. You have to wait for an entire property assessment cycle until you’re eligible during the following year.
People filing for a Nebraska homestead exemption because they’re older than 65 must hit that age before January 1st of the tax year; otherwise, they’re ineligible until the following year.
Homeowners need to buy the property before January 1st to apply for exemptions. You need to maintain ownership until at least August 15th to receive tax relief. If you can’t meet these provisions, you might want to try selling a house with a tax lien in Nebraska to keep your finances secure.
When applying for your county’s homestead exemption, you must show proof of your income. The most common examples of an income statement are your tax forms, including:
- Federal Income Tax Return, Form 1040
- Social Security Return, Form SSA-1099
- Pension and Annuities Return, Form 1099-R
- Interest and Dividends Return, Form 1099-INT, 1099-DIV, and 1099-OID
- Railroad Retirement, Tier I RRB-1099 or Tier II RRB-1099-R
- IRA Distributions, Form 1099-R
Applicants also need to show their deductible medical expenses paid out-of-pocket. These fees include insurance premiums, prescription drug plans, nursing home policies, and medical equipment purchases. Any fees paid to doctors, dentists, nursing homes, hospitals, and other medical professionals also apply to this section.
Your application applies for the following year, so you’re still liable for property taxes while the county reviews your claim. If they don’t grant you 100% relief, you also still owe the remaining amount of property taxes each year.
If you move during the eligibility period between January 1st and August 15th, the government works with you. They allow you to transfer your homestead exemption to your new property. With this in mind, you might want to sell a house fast in Omaha to take advantage of that leeway.
Nebraska property tax exemptions can give people tax relief, especially senior citizens and disabled veterans. However, income and house values play a big part in the homestead exemption, even if you meet those general guidelines.
You can also pay less property tax by checking out the average tax rates per county. Some areas have a rate of less than 1%, while others surpass 2%. If you need to move to keep your taxes low, we buy houses in Lincoln quickly to simplify your transition.