This bill establishes a new exemption from ad valorem taxation for qualified homesteads in Oklahoma, effective from January 1, 2027. The exemption will be phased in over three years, starting with a 33.33% exemption for the tax year 2027, increasing to 66.67% in 2028, and reaching a full 100% exemption for tax year 2029 and beyond. The bill mandates that this new exemption will supersede any lesser exemptions currently in place, ensuring uniform application across all qualifying homesteads in the state.

However, the exemption will not apply to ad valorem taxes levied for the payment of principal or interest on any valid bonded indebtedness incurred by school districts, counties, municipalities, or other political subdivisions prior to December 31, 2026. The Oklahoma Tax Commission is tasked with creating the necessary rules and forms to implement this exemption by the end of 2026, and county assessors are required to automatically apply the exemption to properties already receiving the homestead exemption.