It's time again to start thinking about tax season. It may not be your favorite 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 asked questions when filing your exemption, along with all the resources you will need to get started today!
What Is a Homestead Exemption
The Homestead Exemption is essentially an exemption from property taxes that can be claimed 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 appraised 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 owned by the homeowner and used for a residential purpose, such as a yard.
What Kinds of Exemptions 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. Each taxing unit decides if it will offer the exemption and at what percentage. This percentage exemption is added to any other home exemption for which an owner qualifies. 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.
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.
* 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.
* Mail your completed form, along with all required documents, to your county appraisal district.
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.
* A 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.
Residence Homestead Exemption Applications must be postmarked between January 1 and April 30 of the tax year. Early submissions will not be accepted. 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.
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 percent increase. Your home will still be appraised for the full amount, but you will not be taxed on any increased amount above the ten percent.
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. Contact your county appraisal district to determine what exemptions you qualify for.
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. 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. 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.
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 prorated and the homestead exemption will only be in effect during the time when the qualifying party owned 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 be submitted to your county appraisal district. Click here for a full list of Texas property tax exemptions.
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.
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
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 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
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. 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.