Texas is home to hundreds of thousands of veterans. As of 2019, 7% of civilian adults in Texas are veterans, and there are thousands of additional Texans serving in the military. Knowing the state and federal programs available for active-duty military members, veterans, and spouses of veterans can help you navigate everything from home ownership to medical needs to education opportunities.
Not only does Texas have a wide variety of state-based programs for securing mortgage loans and grants, but there are also tax relief measures available for home-owning veterans. One of the most important homeownership benefits options that veterans can access is the veterans property tax exemption. This measure is one of the many avenues the state offers to reduce property tax obligations. It, alongside homestead exemptions, a property tax protest process, and upcoming changes to property tax laws, can significantly reduce your property tax bill.
What Are People Doing to Reduce Property Taxes for Texans? Veterans Property Tax Exemption and Other Forms of Tax Relief
Texas has the seventh-highest property tax rate in the country. Because there is no personal state income tax, local municipal governments rely on property taxes gathered within their jurisdictions to fund projects and services.
However, the combination of a high property tax rate with sharply increasing property values is leading to incredibly high property tax bills for residents across the state. While virtually all residents are affected by this, it is a particularly challenging financial hardship for residents who rely on fixed incomes or fixed supplemental incomes, including seniors, residents with disabilities, and disabled veterans.
Because Texas has historically had relatively high property taxes—a financial challenge for individual homeowners that has increased over the past few decades—there are many tax relief options that are available for qualifying property owners. These mechanisms include:
- Property tax exemptions—These measures exempt a portion of a property’s value from tax calculations, reducing the overall tax obligations of the property owner. There are different exemptions for different qualifying owners or property types.
- Payment plans—While these don’t change the total property tax amount due, they do provide an adjusted payment schedule. Disabled residents, seniors, disabled veterans and their unmarried surviving spouses, and disabled veterans with a donated home can pay taxes in four equal installments rather than being responsible for paying all at once on January 31. This is particularly valuable for homeowners who don’t have an escrow account in which to slowly collect the funds throughout the preceding year.
Related: How Do Mortgage Payments Change if Your Taxes Go Up?
- Property tax protests—Property owners can also protest their property’s appraised value. Every year, local appraisal districts release a new appraisal value for every property in their jurisdiction; this value determines the taxable value and overall tax bill due. However, any property owner who thinks the appraisal value is incorrect can protest it and fight for a lower appraised value.
Combining these measures and using all of the tax relief options available to you can keep your property value in check, reduce your total property tax bill, and make paying on time more affordable.
Reduce Your Property Taxes With a Veterans Property Tax Exemption
A veterans property tax exemption is one of the property tax relief options available to Texans. Disabled veterans can receive a partial or full exemption depending on the extent of their disability as determined by their U.S. Veterans’ Administration disability rating. Those levels are:
- For a disability rating between 10% and 29%: The exemption is up to $5,000 from the value of the property
- For a disability rating between 30% and 49%: The exemption is up to $7,500 from the value of the property
- For a disability rating between 50% and 69%: The exemption is up to $10,000 from the value of the property
- For a disability rating between 70% and 100%: The exemption is up to $12,000 from the value of the property
This applies across all property tax levies for the applicable property. Conventionally, property tax exemptions apply to specific property tax levies, such as the school district levy in homestead exemptions. However, qualifying disabled veterans can apply the exemption to all of the levies affecting the property.
For example, if you live in a city with a total tax rate of 2% and have a 70% disability rating, you can exempt the first $10,000 of your home’s value from all levies, resulting in a $200 saving.
The tax reduction can be applied to one property in Texas that the veteran owns, even to properties given to veterans through charitable organizations. Senior disabled veterans (aged 65 or older) can receive a $12,000 exemption with a disability rating of 10% or higher or under other select circumstances. Also, disabled veterans may be able to qualify for both the disabled resident and disabled veteran exemptions.
Disabled veterans may receive a total exemption of their property taxes if they have a 100% disability rating. Surviving spouses and dependents of a veteran who was killed or fatally injured during service can also be eligible for a total property tax exemption.
A Note for Disabled Veterans Who Own More Than One Property
Typically, exemptions apply only to qualifying properties that serve as a primary residence for the applicant. For example, homestead exemptions and senior or disabled exemptions only apply to your primary residence. However, the disabled veteran exemption can apply to any one property you own, even if it’s not your primary residence.
How To Get A Veterans Property Tax Exemption
Property tax collection is managed and enforced through your local county, so any applications will need to be filed through your local county appraisal district or tax office. To start, fill out Form 50-135, Application for Disabled Veteran’s or Survivor’s Exemptions, and submit it to your local office.
The application should be submitted between Jan 1 and April 30 each year. However, counties have different rules in place for partial years or late applications, such as if an injury, death, or change in disability rating occurs after April 30 in a given year. Veterans or surviving spouses or dependents can apply for this for up to five years after the delinquency date on the property’s taxes (which is typically February 1).
Spouse and Survivorship Provisions for Veterans Property Tax Exemptions in Texas
These property tax benefits are available for eligible surviving spouses and dependents of qualifying disabled veterans. For example, surviving spouses may continue to receive the partial or total exemption their spouse qualified for (or would have qualified for) indefinitely, provided they do not remarry. If a surviving spouse moves to a different property, they are eligible for the same dollar-value exemption they received in their last year in the initial home.
Surviving spouses may also qualify for an additional $5,000 exemption on any one property (even if it is not their primary residence).
Additional Exemptions Available to Home-Owning Veterans in Texas
Disabled veterans who own homes in Texas may be eligible for additional property tax exemptions that can lower their bills even further. Some of these options include:
- General residence homestead—This will remove $100,000 of a home’s assessed property value from the school district levy. Also, you can cap any increases in your home’s assessed value at 10% per year. Homeowners only qualify for this exemption if they primarily reside at the address.
- Agricultural land—Rather than exempting part of the assessed property value, this tax provision applies a different method of calculating assessed land value for qualifying homesteads. This tends to significantly lower the assessed value overall.
- Disabled and senior—Veterans may also be eligible for tax relief provisions intended for senior (65 years and older) or disabled homeowners. However, you may not simultaneously use all potential exemptions. Disabled and senior exemptions will remove $10,000 of a property’s value from school district tax calculations.
Commonly, many disabled veterans with partial exemptions will also apply for (or automatically receive) a general residence homestead exemption.
Changes to Texas Property Tax Codes
The Texas government passed a series of changes to the laws affecting property taxes, and these changes were approved in November. Notably, property owners will see these and other changes:
- The general residence homestead exemption increased from $40,000 to $100,000 for school district levies. This will result in an estimated increase in savings of $600.
- Non-homesteaded properties will have a 20% value increase cap. Previously, this cap was only available for homesteaded properties and prevented anything more than a 10% increase. Now, qualifying properties such as second homes, commercial properties, and rental properties cannot have their taxable value increase by more than 20% in a given year. This is a three-year pilot program.
Related: Ultimate Guide To Proposition 4 And How The New Texas Property Tax Laws Will Lower Your Property Tax Bill
While the specific measures for disabled veterans and surviving spouses will not be impacted, these changes can result in a significant decrease in your property tax bill for 2023 and subsequent years.
Another Strategy for Reducing Your Property Taxes: Property Tax Protest
While these provisions can help reduce your tax bill by removing part of your property’s assessed value from tax calculations, you might also find that your property’s assessed value itself seems too high.
You may see your property value skyrocket based on increasing demand in your neighborhood or because recently sold or improved properties unfairly affect your property’s estimated value. In these circumstances, you can file a protest with your local tax office.
Through this protest process, you can explain why the assessed value is wrong and make a counter-assessment. You can also submit evidence to support your protest, such as photographs of outdated fixtures in your home, “comps” or assessments of comparable properties in your neighborhood, and estimates of the cost of upgrades needed to update your home to bring it in line with the assessed value.
Your city or county tax district may respond by agreeing to your protest, offering a lower assessed value number, or requesting your presence for an informal hearing to discuss the matter further.
You also don’t have to manage this process by yourself. You can appoint a representative to speak in the hearing on your behalf, or you can work with a tax protest service that manages all the steps for you, from filing the protest notice to assessing your property and gathering evidence to arguing on your behalf during the hearing.
Get Help Protesting Your Property Taxes
Reducing your property taxes can save you hundreds of dollars every year and even tens of thousands of dollars across the entire length of your time in your home. At Home Tax Shield, we’re here to help veterans and other homeowners in Texas fight to reduce their property taxes through protests so you have a property tax bill that better matches your property and your budget. Sign up today to learn more about our services and to get started reducing your property taxes.