You must file with the county or city where your home is located. Each county has different applications and required documents.How to apply for the Homestead Exemption to reduce your Real Estate Tax bill if you own your home in Philadelphia. The Taxpayer Relief Act provides for property tax reduction allocations to be distributed to school districts through a "homestead or farmstead exclusion." The homestead can't exceed one acre in a city or 160 acres in a rural area. A homestead exemption can benefit homeowners if one spouse in a twoincome household dies. This Video Shows you How to Complete an Application for Homestead Exemption. The Homestead Exemption reduces the taxable portion of your property assessment if you own your primary residence in Philadelphia. From this screen, you can apply for LOOP. You can also remove your Homestead Exemption, if necessary.