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what is texas homestead exemption

what is texas homestead exemption

what is texas homestead exemption

It’s time again to start thinking about tax season. It may not be your favourite time of the year, but tax season can bring some pretty sweet perks for homeowners who bought a home in Texas in the previous year.

Starting January 1st until April 30 of the tax year, every homeowner has the opportunity to submit an application for the Residential Homestead Exemption. To help you get the ball rolling, we’ve put together some frequently questions when filing your exemption, along with all the resources you will need to get start today!

What Is a Homestead Exemption

The Homestead Exemption is essentially an exemption from property taxes that can claim by homeowners on their primary residence. It removes part of your home’s value from taxation, lowering your taxes. For example, if your home is judge at $350,000, and you qualify for a $25,000 exemption, you will pay taxes on the home as if it was worth only $325,000.

Your primary residence is the only property that qualifies for a Homestead Exemption. It can be a house, condominium, or manufactured home on owned or leased land, so long as you both live in the structure and own it. A homestead exemption can also include up to 20 acres of land if the land is possess by the homeowner and used for a residential purpose, such as a yard.

what is texas homestead exemption

What Kinds of Homestead Exemption Are Available?

There are multiple kinds of homestead exemptions available, and they vary by location. Some exemptions are mandatory state-wide, while others are “local option,” meaning it is up to the county or city government to decide the extent of the exemption. Here are the main kinds of homestead exemptions available, as reported by the Texas Comptroller of Public Accounts.

School taxes: All residence homestead owners are allowed a $25,000 homestead exemption from their home’s value for school taxes.

County taxes: If a county collects a special tax for farm-to-market roads or flood control, a residence homestead is allowed to receive a $3,000 exemption for this tax. If the county grants an optional exemption for homeowners age 65 or older or disabled, the owners will receive only the local-option exemption.

Age 65 or older and disabled exemptions: Individuals age 65 or older or disabled residence homestead owners qualify for a $10,000 homestead exemption for school taxes, in addition to the $25,000 exemption for all homeowners. If the owner qualifies for both the $10,000 exemption for age 65 or older homeowners and the $10,000 exemption for disabled homeowners, the owner must choose one or the other for school taxes. The owner cannot receive both exemptions.

Optional percentage exemptions: Any taxing unit, including a city, county, school, or special district, may offer an exemption of up to 20 percent of a home’s value. But, no matter what the percentage is, the amount of an optional exemption cannot be less than $5,000. Therefore each taxing unit decides if it will offer the exemption and at what percentage. So this percentage exemption is added to any other home exemption for which an owner qualifies. However, the taxing unit must decide before July 1 of the tax year to offer this exemption.

Optional age 65 or older or disabled exemptions: Any taxing unit may offer an additional exemption amount of at least $3,000 for taxpayers age 65 or older and/or disabled.

what is texas homestead exemption

Who Qualifies for an Exemption?

Any homeowner in the state of Texas can qualify for a homestead exemption, so long as you meet the following criteria:

You own your home as of January 1 of the tax year and reside in it as your primary residence.

So you are an individual homeowner, not a corporation or business entity.

You did not claim any other property for homestead exemption in the same tax year.

How to Apply For a Homestead Exemption

Applying for a homestead exemption may sound complicated, but with a two-step process and familiarity with the deadlines, you can save thousands of dollars on your property taxes.

Steps to Apply

* Download the Residence Homestead Exemption Application from your county appraisal district’s website (See our list of quick links below) and fill it out.

what is texas homestead exemption

Required Documents

To complete your Residence Homestead Exemption Application, you will need

* The Residence Homestead Exemption Application (Form 50-114) for your county appraisal district.

* A copy of your valid Texas driver’s license or identification card with an address matching your homestead address.

Manufactured homeowners must also provide one of the following:

A copy of the Texas Department of Housing and Community Affairs statement of ownership.

The copy of the sales purchase agreement, other applicable contract or agreement or payment receipt.

A sworn affidavit (Form 50-114-A) indicating that you are the owner of the manufactured home and the seller did not provide you with the applicable contract or agreement.

what is texas homestead exemption

Application Deadlines

Residence Homestead Exemption Applications must be postmarked between January 1 and April 30 of the tax year. Therefore early submissions will not be accepted. So if you miss the April 30 deadline, you have up to one year after you pay your taxes to apply.

For those who wish to take advantage of the Age 65 or Older or Disabled Exemption, you must apply no later than one year from the date you turned 65 or became disabled in order for it to apply towards that year. If you miss the deadline, you may apply for the following year.

Once you receive an exemption, you don’t need to reapply again unless the chief appraiser sends you a new application. If you should move or your qualifications otherwise end, you need to inform the appraisal district in writing before May 1st of the tax year.

what is texas homestead exemption

Homestead Cap

Another benefit of filing a homestead exemption is the homestead cap, which takes effect after you have had an exemption in place for two years. This tax appraisal cap allows that, if your home appraises for more than ten percent above its appraised value the previous year, you will only be taxed up to the ten per cent increase. Your home will still be appraised for the full amount, but you will not be taxed on any increased amount above ten per cent.

Over-65 Homeowners

Homeowners over age 65 are entitled to additional exemptions. You will be eligible for these exemptions as soon as you turn 65, you do not need to be that age as of January 1 in order to qualify for that tax year.

All school districts in Texas grant a $10,000 exemption for qualifying homeowners aged 65 or older. This exemption will be added to the standard $25,000 homestead exemption you qualify for. Many cities, counties, and other taxing units may also offer additional exemptions of at least $3000 for homeowners 65 or older. So contact your county appraisal district to determine what exemptions you qualify for.

what is texas homestead exemption

Homeowners with Disabilities

Disabled homeowners can also apply for additional exemptions. To qualify, you must meet the criteria of the Social Security Administrations’s Disability Evaluation, though you do not have to be receiving disability benefits.

This specifically includes those who have a medically diagnosed physical or mental impairment that prevents you from having a job and which is expected to last more than 1 continuous year or to result in death. Those who receive federal disability benefits under the Old-Age, Survivors, and Disability Insurance Program will also qualify.

Homeowners with disabilities are also entitled to the additional $10,000 exemption granted by the school districts. However, no homeowner can claim both the Age 65 or Older exemption and the Disabilities exemption. Therefore if you qualify for both, you must choose one to apply for.

Many cities, counties, and other taxing units may also offer additional exemptions of at least $3000 for disabled homeowners. So contact your county appraisal district to determine what exemptions you qualify for.

Disabled Veteran Homeowners

100% disabled veterans are eligible for a homestead exemption equalling 100% of the value of your residence homestead. To qualify, your disability must be service-related and result in a Veteran’s Administration 100% disability rating or unemployability classification and you must receive 100% disability payments.

what is texas homestead exemption

Selling or Buying a Home with an Existing Homestead Exemption

Very few people buy or sell a home on January 1, so property taxes can get confusing in that first year as both the buyer and seller will owe taxes on the property, pursuant to their time in ownership. Homestead exemptions will also apply to those taxes, so it’s important to know the rules.

For properties with standard homestead exemptions in place, those exemptions will usually remain for the year of the sale and the taxes will reflect those exemptions, benefitting both seller and buyer.

The buyer will then have to apply for a homestead exemption in the following year as the new owner of the property. It is important to note that any homestead cap in place will be removed when the new homestead exemption is applied for and this can cause a significant jump in property taxes that first year as the home will be taxed based on its full appraised value.

If the property has an Age 65 or Older or Disability exemption, the exemption will only stay in place for the year if the qualifying person does not establish a homestead exemption on their new property during that year or if the new owner qualifies for that exemption in their own right.

If those criteria are not met, the taxes will be split and the homestead exemption will only be in effect during the time when the qualifying party possess the property. Again, property taxes in this situation could be much higher than what was paid the previous year.

Other Property Tax Exemptions

There are a number of additional partial or absolute property tax exemptions available to Texas property owners. They offer exemptions for a variety of circumstances, including inherited property owned by multiple parties, solar and wind-powered improvements, and properties owned by charitable organizations, to name a few.

All exemptions will require a specific application to submit to your county appraisal district. Click here for a full list of Texas property tax exemptions.

what is texas homestead exemption

Texas Homestead Exemption Quick Links

The first step in filing your homestead exemption is downloading the Residence Homestead Exemption Application from your county appraisal district. To make this easy for you we’ve compiled links and contact information for all counties in and around Texas’ major metro areas. If your county isn’t here, click here for a list of all Texas county appraisal districts.

Austin Metro

Travis County | 512-834-9138

Williamson County | 512-930-3787

Hays County | 512-268-2522

Bastrop County | 512-303-1930

Blanco County | 830-868-4013

Burnet County | 512-756-8291

Lee County | 979-542-9618

Caldwell County | 512-398-5550

San Antonio Metro

Bexar County | 210-224-8511

Comal County |830-625-8597

Guadalupe County | 830-372-2871

Wilson County | 830-393-3065

Atascosa County | 830-569-8326

Medine County | 830-741-3035

Bandera County | 830-796-3039

Kerr County | 830-895-5223

Corpus Christi Metro

Nueces County | 361-881-9978

Kleberg County | 361-595-5775

Jim Wells County | 361-668-9656

San Patricio County | 361-364-5402

Aransas County | 361-729-9733

Belton-Temple Metro

Bell County | 254-939-5841

Burnet County | 512-756-8291

Lampasas County | 512-556-8058

Coryell County | 254-865-6593

McLennan County | 254-752-9864

Falls County | 254-883-2543

Milam County | 254-697-6638

Williamson County | 512-930-3787

Dallas Metro

Dallas County | 214-631-0910

Denton County | 940-349-3800

Collin County | 469-742-9200

Ellis County | 972-937-3552

Grayson County | 903-893-9673

Hopkins County | 903-885-2173

Hunt County | 903-454-3510

Johnson County | 817-648-3000

Kaufman County | 972-932-6081

Navarro County | 903-872-6161

Parker County | 817-596-0077

Rockwall County | 972-771-2034

Stephens County | 254-559-8233

Tarrant County | 817-284-0024

Van Zandt County | 903-567-6171

Wise County | 940-627-3081

Wood County | 903-763-4891

Houston Metro

Harris County | 713-957-7800

Liberty County | 936-336-5722

Chambers County | 409-267-3795

Galveston County | 409-935-1980

Montgomery County | 936-756-3354

Waller County | 979-921-0060

Austin County | 979-865-9124

Fort Bend County | 281-344-8623

Brazoria County | 979-849-7792

Matagorda County | 979-244-2031

Wharton County | 979-532-8931

Colorado County | 979-732-8222

San Jacinto County | 936-653-1450

Walker County | 936-295-0402

While no one really enjoys thinking about taxes, a little preparation and knowledge will go a long way in saving you money every year. Get your homestead exemption application in by April 30 to allow time for your county appraisal district to process it before your yearly tax statement is sent. However, as always, if you’re looking to buy or sell your home this year, reach out to the amazing agents at Better Homes and Gardens Real Estate HomeCity.

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