Texas property tax law changes every few years. See the latest posts for the most up-to-date information.
Homestead exemptions remove a portion of your home’s value from taxation, thereby lowering your taxes. The tax rate remains the same, but the rate is based on a lesser amount. The Texas homestead exemption is a voluntary exemption process established by the Texas legislature in 2003.
Not all Texas homeowners qualify, however. Only your principal residence that is owned by you (versus a company) and is your primary residence on January 1 of that year. Your homestead can be a separate structure, manufactured home or condominium that you live in and is located on your owned or leased property.
Read on to learn the details of Texas home exemptions and how you can manage your property taxes without so much hassle.
How the Texas Home Exemptions Works
The Texas homestead exemption is the most common exemption and is based on the concept of the homestead, defined as the house the person owns and occupies as their residence. The homestead exemption is one of Texas’s most common exemptions to obtain a tax break and is often used by homeowners, senior citizens, disabled persons, and the chronically ill.
The Texas Assessor and County Clerk have the authority to assess property at the market value. Property taxes are estimated at the market value on the first day of each January. It is possible for the property tax assessor to assess your property at less than market value or to assess your property at a value below the market value if the market value is less than $100,000.
There are other Texas home exemptions, including:
- 65 years old and above and the disabled
- Disabled veterans and surviving spouses of disabled veterans
- Surviving spouses of first responders killed in the line of duty
- Manufactured homeowner
To claim the 65 years or older exemption, you need to meet the following qualifications:
- Be 65 years old or above– if you turn 65 years old after Jan 1, you automatically qualify for the exemption for the whole year
- The address you are applying for the exemption matches your government-issued photo identification
- You meet the Social Security Administration definition for the disabled. In addition, you should be receiving the Old Age, Survivors, and Disability Insurance Program disability benefits under federal law.
- You are an individual homeowner and not a business entity or a corporation
- You own the home as of January 1 and reside in it as your primary residence
- You didn’t claim any other property for homestead exemption in the same year
Under section 11.13(b), the state’s tax code requires public school districts to give an exemption of $25,000 on “residence homesteads” located within their districts.
For instance, if your local tax appraiser determines that your home is worth $200,000, the standard Texas homestead exemption allows you to reduce the taxable value of your property by $25,000. In that case, you will only be paying taxes on the $175,000 worth of your home, potentially saving you thousands of dollars annually.
How to Apply for Exemptions
Applying for exemptions is relatively straightforward. You can complete the exemption process online if you meet the eligibility requirements. The application process varies from one county to the other, but it generally follows the steps below:
- Apply for the exemption by filing Form HD-10, Application For Exemption For Person 65 Years Or Older Or Disabled, with the county appraisal district.
- Get a copy of the Property Tax Form 50-114 from the local appraisal district.
- Fill in the required personal information about the property you are claiming as your primary residence.
- Follow the instructions provided by the local appraisal district to submit the form.
- Ensure you provide any additional information requested by your district, such as a copy of your driver’s license
- You should receive a confirmation from your local appraisal district. Follow up with them if you don’t
When applying for a Texas home exemption, you must provide various official documents to support your claim. These documents will vary from one county to the other. However, most counties require the following documents when claiming the exemption:
- The Residence Homestead Exemption Application from your county appraisal district (Form 50-114)
- A copy of your identification card or driver’s license with an address that matches your primary homestead address
If you’re a manufactured homeowner, you need to provide the following:
- A copy of the statement of ownership from the Texas Department of Housing in Community Affairs
- A copy of your sales purchase agreement, sales receipt, or any other applicable agreement
- An affidavit (Form 50-114-A) showing that you are the owner of the manufactured house
Application Deadlines for the Texas Home Exemptions
According to the Texas Comptroller, your completed application and documentation are due no later than April 30th of the tax year for which you are applying; however, you may file up to two years after the delinquency date, which is usually February 1st.
If you wish to take advantage of the Age 65 and above and the Disabled Exemption, ensure you apply no later than one year after you reach age 65 or become disabled. This ensures you apply towards that year, but if you miss the deadline, you have the chance to apply the following year.
After sending your application and it goes through, you don’t need to reapply again unless the district appraiser sends you an application. If you relocate from your listed primary residence or your qualifications end, inform your appraiser in writing before May 1st of the current tax year.
How to Save Money on Property Taxes
Several tax benefits come with filing for an exemption.
65 and Over Homeowners
You will be eligible for additional exemptions when you turn 65 years old. The good thing is that you don’t need to be 65 years old by January 1 to qualify for the exemption in that year. Qualifying homeowners aged 65 years and older get a $10,000 exemption grant from school districts in Texas. The exemption is added to the standard $25,000 exemption you qualify for.
In addition, you may get additional exemptions adding up to $3,000 depending on your city or the taxing unit. Talk to your district appraisal officer to understand how much exemption you qualify for under this category.
Homestead Cap
The homestead cap takes effect two years after you have had an exemption. Under this tax appraisal cap, if your home appraises for over 10% above the previous year’s appraised value, you will only be taxed up to a 10% increase. In this case, your home will still be appraised for the same amount, but it won’t be subject to any tax increase for the amount above 10%.
Homeowners with Disabilities
If you meet the criteria of the Social Security Administration’s Disability Evaluation, you can apply for additional home exemptions. You qualify for the benefit if you have been diagnosed with a mental or physical impairment that prevents you from working. The impairment should last for a year or lead to death.
You are also eligible if you receive federal disability benefits through the Old-Age, Survivors, and Disability Insurance Program will be eligible as well. If you are a homeowner with disabilities, you are also suitable for a $10,000 tax break provided by school districts. But if you are not a homeowner, you can claim both the Age 65 or Older and the Disabilities exemptions.
Disabled Veteran Homeowners and Surviving Spouses
If you are a veteran who is 100% disabled, you are eligible for a homestead exemption equal to 100% percent of the value of your homestead. To be eligible, your disability must be service-related and result in a 100% percent disability rating for unemployability classification from the Veterans Administration and 100% disability payments. The surviving spouse of a member of the US armed services who is killed in the line of duty is also allowed a 100% property exemption if they have not remarried since the death of their spouse.
Tips to Help You Lower Property Taxes in Texas
Of course, the first thing to lower your property taxes in Texas is to file for an exemption. However, not everyone qualifies for a Texas home exemption, and you may still want to protest your taxes if you feel they are unfair.
You always have the right to try to lower your property taxes further by filing a property tax protest. After filing, the property tax assessor will not be able to increase your appraisal that year, but they can still assess your property the next year. When you file, they will contact an independent appraiser to review your property to determine if the tax assessment is fair and accurate. Be sure you walk your property with the assessor, asking questions and pointing out any reasons why you believe your property value is overvalued.
If you decide to protest your taxes, be sure not to build or improve your property. Any improvements can be grounds for keeping your property assessment as is. In fact, if you can document any damage or loss of property value, such as the loss of large trees or structural damage, you can boost your case for a lower assessed value.
You should also research similar properties in your neighborhood to see if your values are in or out of line. If all of your neighbors’ properties are valued similarly, you may have a harder time justifying why your property should be assessed lower.
Get Help With Your Property Tax Today
Texas property tax is one of the highest in the nation because the state requires no state income tax. Fortunately, homeowners have several opportunities to lower their taxes: exemptions and property tax protests.
With property taxes only increasing with increases in property values across the state of Texas, homeowners need to protest their property tax values. Most experts believe homeowners should always protest every year. Some property tax protest companies who help owners by protesting on their behalf boast success rates of over 80%, saving homeowners hundreds of dollars in a single year.
Protesting your taxes on your own can be labor-intensive and stressful. Home Tax Shield has a high success rate, costs 40% less than other protest companies, and signing up takes just minutes online. Contact us to get started.