Homestead Exemption – homestead exemptions (sometimes called deductions) are a type of property tax relief. Homestead exemptions are typically allowed for homeowners who use their home as their primary residence. These exemptions reduce the assessed value of the home on which property tax bills are based. Homestead exemptions are typically equal to a percentage of assessed value and are limited to a set dollar amount. For example, a homestead exemption might be equal to 10% of assessed value or $45,000 whichever is less.