Homestead Exemptions During Nursing Home Stays: How Long-Term Care Affects Property Taxes

When an aging homeowner enters a skilled nursing facility, assisted living residence, or memory care center, the family faces complex financial and health care decisions. Amid Medicaid applications and medical care plans, an overlooked risk is the potential loss of the homeowner property tax homestead exemption and assessment growth caps.

Because homestead exemptions require the owner to occupy the dwelling as their primary residence, county assessors routinely audit vacant homes. However, most state tax statutes recognize the reality of medical care, establishing explicit protections that preserve homestead exemptions during extended convalescent stays as long as specific statutory requirements are met.

The intent to return doctrine

In property tax jurisprudence, a temporary absence from a primary residence does not constitute an abandonment of domicile. The decisive legal test is the homeowner intent to return.

If a homeowner moves into a healthcare facility with the genuine intention of returning home once health stabilizes, courts and appraisal review boards treat the absence as involuntary and temporary. To maintain this legal protection, the homeowner must not establish a permanent residence elsewhere, purchase another home, or register to vote from another residential address.

State statutory protections: Texas, Florida, and California

State property tax statutes provide clear safe harbors for medical absences.

• Texas Tax Code § 11.13(l): Texas explicitly states that an individual may not lose their homestead exemption if their temporary absence from the residence is caused by nursing home or convalescent facility admission. As long as the property is not rented out or used for commercial purposes, the homeowner retains their homestead exemption indefinitely.
• Florida Statute § 196.061: Florida law specifies that involuntary placement in a hospital, nursing home, or assisted living facility does not constitute abandonment of homestead status. The homeowner retains their $50,000 exemption and their 3% Save Our Homes assessment cap.
• California Revenue and Taxation Code § 218: California maintains the homeowner exemption during institutional medical stays, provided the owner or their representative intends to return or leaves personal furnishings on the premises.

Renting out the home to pay for healthcare

Families frequently contemplate renting out the vacant home to generate rental income that helps cover expensive monthly assisted living or nursing home bills. However, renting the property is the single most common reason assessors revoke exemptions.

In many states, leasing the entire residence to a tenant converts the property into an income-producing rental, which extinguishes the homestead exemption and uncaps assessed values. Some states offer narrow statutory exceptions permitting short-term rentals under medical hardship, but owners must review local rules before executing a residential lease.

Protective steps for family guardians and agents

Family members holding a durable power of attorney should take three administrative steps to protect the elder property tax status.

• File a medical absence affidavit: Submit a formal affidavit to the county assessor explaining that the owner absence is medically necessary and temporary, supported by a physician note.
• Update the tax billing address: Change the mailing address for tax statements to the power of attorney or guardian address so annual reassessment and renewal notices are not lost in an empty mailbox.
• Maintain personal furnishings and utilities: Leaving basic utilities active and furnishings inside the home provides tangible evidence of an intent to return if an assessor conducts an on-site field inspection.

Before vacating a home for long-term convalescent care, family representatives should notify the county assessor in writing. Taking proactive measures preserves essential senior tax exemptions and prevents unexpected reassessments.