Everyone wants to save money and pay less in taxes, right?
The fastest way to a tax cut on what is usually your largest purchase is to apply for a homestead exemption. A homestead exemption removes part of the value of your home from taxation and lowers your tax base. The general rule applied to knowing if a property qualifies for a homestead in Texas is that the home must be one you own and it must be your primary residence.
Type of Homestead Exemptions
General Homestead
Have you moved recently? If you recently moved from one home to another and the new location is your principal residence, you qualify. You can apply by providing all required documentation the day following your closing date. It is best to knock out this application before tackling the dreaded move so you do not forget.
Over 65 Exemption
Did you or your spouse have our 65th birthday recently? If so, you will qualify for an Over 65 Exemption anytime in the year after you turn 65. There are two benefits to the Over 65 Exemption. The first is an additional $10,000 in exemption and the second is your portion of school taxes will not increase from the current rates unless you make improvements to the home.
Surviving Spouse (of Someone with Over 65 or Disabled Person Homestead)
Did your spouse recently pass away and were they 65 and/or disabled? The surviving spouse must be at least 55 years of age, have been living in the homestead at the time of death and still residing in the home.
Disabled Person Homestead
Have you or your spouse met Social Security’s qualification for disability status? This exemption includes those who qualify as disabled for the purposes of payment and benefits under federal old-age, survivors or disability insurance. You can not receive an age 65+ exemption if your receive a Disabled Person Homestead. To obtain this exemption you must apply no later than one year after you qualify for the exemption.
Disabled Veteran or Survivor Homestead
Are you or your spouse a veteran with a 100% service-connected disability? For an individual who receives 100% compensation due to a service-connected disability and has a rating of 100% disability or individual employability. The surviving spouse must have been married to the disabled veteran, must have been living in the home when the disabled veteran died and have remained in the residence.
Who Needs to Apply
If you meet any of the requirements outlined in the above questions, reach out to your REALTOR or County Tax Office regarding any additional requirements or documentation needed for other exemptions outside of the General Homestead Exemption.
Does My Home Qualify for a General Homestead Exemption
To qualify for General Homestead Exemption you must be occupying your home as your primary residence. The home must be your sole primary residence in the state and you must own the home. If you temporarily move away from your home, you can still get an exemption for up to 2 years if you do not establish another residence or your intend to return. You may exceed the two year limit if you are in military service outside of the United States or live in a facility providing services related to health, infirmity, or aging. In Texas, temporarily renting our your home does not change its homestead character if you have not acquired another homestead.
What do I need to apply for my Homestead Exemption
The most important thing you need to apply is yourself. The application process for a general homestead is a one time application. After purchasing a home you will be inundated with offers from third parties (and in some instance companies specializing in scamming) to file your homestead exemption for you. Do NOT entertain or hire one of these companies. These companies often charge fees and may even ask for personal information (phishing) that is not needed for the process and can be used to your financial detriment. Renewing a drivers license is more complicated that applying for your homestead exemption. Applying requires no cost or fees and the only pieces of documentation required for one to successfully file a general homestead exemption is a Texas driver’s license showing the same address to which your are filing the exemption for and your vehicle registration matches your home/drivers license address. If you do not have a drivers license, a notarized affidavit saying you do not own a car or possess a driver’s license along with a utility bill with the same address as the application, can be submitted. Only one person’s signature is required on a general homestead exemption, the individual signing must be listed on the deed. A new application is only required when a property owner’s residence homestead is changed or if requested via written notice from your county’s chief appraiser.
The information requested on the form will be for your name, signature, property address and legal description (if known – can be located on your closing statement or property appraisal). If you are applying for a homestead on a manufactured home you will need the home’s make, model and identification number will be requested. This information can also be found on your property appraisal or closing statements. As stated above, there is no need to hire an outside company, if you need additional assistance, please reach out to your REALTOR as they would be happy to assist.
Besides the Tax Savings, What is a Homestead Exemption For?
A homestead exemption removes part of the value of your home from taxation and lowers your taxes. Other than the exemption of disabled veterans or survivors, the exemptions apply only for your homestead. They do not apply to other property you may own. The amount of savings depends on the exemption and the amount of the exemption allowed by each taxing unit. To illustrate this, if you owned a property valued at $200,000 and your qualified for a homestead exemption ($25,000), then you’d be required to pay taxes on a $175,000 tax value vs a $200,000 tax value.
Any taxing unit, including a school district, city, county or special district, may offer an exemption for up to 20% of your home’s value. The amount of an optional exemption can not be less than $5,000, no matter the percentage. As an example, if you owned a home valued at $20,000 and your city offers a 20% exemption, your exemption would be $5,000 even though 20% of $20,000 is just $4,000.
In Texas, there are two distinct laws for designating a homestead; The Texas Tax Code and the Texas Property Code. The Texas Tax Code offers homeowners a way to apply for homestead exemptions to reduce local property taxes. The Texas Property Code allows homeowners to designate their homesteads to protect the homeowners from a forced sale to satisfy creditors (with limitations). This law doesn’t protect the homeowner from tax foreclosure sales of their homes for delinquent taxes. For more information on Texas Property Code contact the Office of Attorney General at www.oag.state.tx.us
To get started with submitting your homestead exemption. Please click on the link below that corresponds with the county our home resides in. Once you have arrived on the home page of the county website, look for the forms tab or section which will direct you to your county’s printable or online form.
Austin and Surrounding County Appraisal Districts
Bastrop County Appraisal District
Blanco County Appraisal District
Burnet County Appraisal District
Caldwell County Appraisal District
Hays County Appraisal District
Llano County Appraisal District
Williamson County Appraisal District
Dallas/Fort Worth and Surrounding County Appraisal Districts
Houston and Surrounding County Appraisal Districts