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Did you know that you could save money on property taxes by filing for a Texas homestead application? That’s right! Depending on where you live in Texas, anywhere from 25-45% of the value of your home can be exempt from property taxes. This blog post will walk you through the process of filing for a homestead exemption and choosing the exemptions you qualify for. Let’s get started!
How the Texas Residential Homestead Exemption Works
It’s not hard to qualify for a homestead exemption if you own a home in Texas. And if you pay taxes, getting that tax break makes a difference! The percentage exemption you receive from your property tax home value can take thousands off your tax bills!
The owner qualifies to receive a homestead exemption if:
- The home is your principal primary residence as of Jan 1 of that tax year
- You are the owner, not a corporation (a business entity does not own your home)
- You do not claim an exemption on another residence homestead.
Even if you live elsewhere temporarily, if you don’t establish a principal residence elsewhere, intend to return to the home, and are away for less than two years, you can keep your existing homestead exemption.
If you plan to stay away for more than two years, you must be in military service or live in a facility providing services related to health, infirmity, or aging to keep your residence homestead exemption.
Filling Out Your Homestead Application Texas
Submit your homestead exemption application by downloading and filling out the Application for Residential Homestead Exemption (PDF). Also, include any needed supporting documentation.
Apply for a homestead exemption to the appraisal district where your home is, and ensure you include everything needed. You can find your county’s appraisal district in this Texas County Directory. You can also contact your county’s appraisal district with any questions.
Some items you may need to include are:
- Copy of your ID: A Texas driver’s license or state identification card. The address listed on the driver’s license or state-issued personal identification certificate must correspond to the property address application exemption address. (However, if you reside in a facility, participate in address confidentiality programs, or are active duty military or spouse, you may not need to send ID.
- Form 50-114-A: This is the Residence Homestead Exemption Affidavits Application
When you receive your property tax bill in the mail, you’ll be glad you took the time and filed for homestead exemptions!
General Residence Homestead Exemptions
Exemptions exist in every county appraisal district for many different types of taxes that include:
School Districts Taxes Exemption:
School taxes offer at least a $25,000 homestead exemption off the home’s value each tax period.
County Taxes Exemption
Counties offer a special tax $3,000 exemption. This means that if they collect a special tax for farm-to-market roads or flood control, a residence homestead receives 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.
Other taxing units offer optional percentage exemptions: Cities, counties, schools, or special districts, may offer an additional exemption worth up to 20 percent of a home’s value.
Homestead Cap
The general homestead exemption saves you money, but in an appreciating housing market, the homestead cap also limits how much your appraised value can increase.
The cap applies to your Texas homestead exemption property beginning in the second year you have a homestead exemption. The cap law provides that if you qualify, the appraised value of your homestead cannot exceed the following:
- This year’s market value or
- last year’s appraised value, plus 10% plus the value added by any new improvements made during the preceding year
Your appraised value cannot exceed whichever number is less!
The cap can provide substantial tax savings if homes appreciate more than 10% per year. (1)
Additional Homestead Exemptions
If you are age 65 or older or disabled, or both, you can also receive additional property tax exemptions of $10,000 per year.
Disabled Exemption
You may qualify for disabled exemptions if you are receiving disability benefits from any of these disability insurance programs:
- Federal Old-Age
- Survivors
- Disability Insurance
However, if you are not the owner on the deed or other real property records, you’ll need to send Form 50-114-A. This is the Residence Homestead Exemption Affidavits Application. You may need to send other compelling evidence to establish your ownership and receive your disability exemption.
Person Age 65 or Older
65 and older exemption goes into effect Jan. 1 of the tax year in which you turn age 65. Property owners not identified on a deed or other instrument
recorded in the applicable real property records as an owner of the residence
homestead must provide an affidavit (Form 50-114-A) or other compelling evidence establishing your ownership interest in the homestead.
Individuals age 65 or older or disabled residence homestead owners qualify for a $10,000 residence homestead exemption for school taxes, in addition to the general exemption for all homeowners.
However, suppose you qualify for both the $10,000 exemption for age 65 or older homeowners and the $10,000 exemption for disabled homeowners. In that case, you may receive both disabled and elderly exemptions in the same year, but not from the same taxing units.
Surviving Spouse of an Individual Who Qualified for Age 65 or Older Exemption
You may receive this exemption as a surviving spouse age 55 or older if your qualifying spouse possessed the homestead at their time of death. The homestead must now belong to you. However, you can’t combine this exemption with a disabled or 65 or older exemption.
100 Percent Disabled Veterans Exemption
Property owners awarded a 100 percent disability compensation due to a service-connected disability and a rating of 100 percent disabled or individual unemployability from the U.S. Department of Veterans Affairs or its successor qualify. You must provide documentation to support this exemption request. Contact your county’s appraisal district, found in this Texas County Directory
Surviving Spouse of a Disabled Veteran Who Qualified or Would Have Qualified for the 100 Percent Disabled Veteran’s Exemption
Surviving spouse of a disabled veteran who has not remarried since the veteran’s death. The surviving spouse’s residence homestead must also now be yours. You must provide documentation to support this exemption request. Contact your county’s appraisal district, found in this Texas County Directory.
Surviving Spouse of a Member of Armed Services Killed in Line of Duty
The surviving spouse of a U.S. armed services member killed or fatally injured in the line of duty who has not remarried since the service member’s death qualifies. You must provide documentation to support this exemption request. Contact your county’s appraisal district, found in this Texas County Directory.
Spouse of a First Responder Killed in the Line of Duty
The surviving spouse of a first responder killed or fatally injured in the line of duty who has not remarried since the first responder’s death qualifies. You must provide documentation to support this exemption request. Contact your county’s appraisal district, found in this Texas County Directory.
Donated Residence Homestead of Partially Disabled Veteran
A less than 100% disabled veteran with a charitably donated residence homestead costing not more than 50% of market value as of the date of the donation. You must provide documentation to support this exemption request. Contact your county’s appraisal district, found in this Texas County Directory.
Pay Less in Taxes
Additional exemptions can add up and help your entire tax year cost you less. It’s worth applying for Texas homestead application to find your exemption amount. When the taxing unit decides the rate and the county collects the taxes, you may pay property taxes this year without gritting your teeth.
Talk with us at Jarrett Law if you need help protesting property appraisal values or struggle with other real estate legal issues. We have experience dealing with homestead exemptions, transfers, and rights. Reach out for a free consultation online to get the homestead exemption you need and save money this tax year!