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The rapid increase in property taxes has been a serious issue for homeowners for over two years, but real estate markets and inflation are making it harder than ever for Texan homeowners to budget for property taxes. Not only are taxes themselves continuing to skyrocket, but rising prices and turbulent markets are already eating into people’s savings.
Some property taxes have even doubled in recent years, with Harris County seeing an average increase of 20% in property tax bills due for 95% of local landowners. This is an especially serious issue for people with fixed income sources, including seniors, people with disabilities, and veterans.
In Texas, veterans have special provisions that can reduce property tax obligations and make owning your own home more affordable. In this guide, we’ll take a deeper look at:
- General efforts to reduce property taxes for homeowners in Texas
- Exemptions, especially veterans property tax exemptions
- Additional strategies for lowering your home’s property tax bill
What Are People Doing to Reduce Property Taxes for Texans?
The rapid demand for real estate in Texas is a prominent reason for the surge in property tax values. Coupled with a lack of state income tax (which makes property taxes essential for county and municipal projects), lawmakers struggled with a way to maintain a balance between allowing for continued growth and trying to keep homeowners from being priced out of the homes they already own. In May of this year, voters approved tax propositions that would have two tax reduction benefits:
- Proposition 1: Senior and disabled homeowners would have a reduced tax obligation for school district taxes over time, with those levies becoming a fixed cost.
- Proposition 2: The general resident homestead exemption would rise from $25,000 to $40,000, lowering the taxable portion of a home’s value by $15,000 for all primary residences owned by their occupants. According to Houston’s Senator Paul Bettencourt, this could save homeowners with a $300,000 home (the average value in the state) approximately $175 per year.
However, these measures are not enough for most homeowners across the state, who will still feel a severe pinch from this year’s property tax bills. If you are a veteran who owns your primary residence in Texas, there are additional steps you can take to reduce your taxes, and these methods are already available under long-standing state and county provisions.
What Are Property Tax Exemptions?
Property tax exemptions remove part of your home’s property value from tax calculations. Before you can know what exemptions apply to you and how much they reduce your total tax bill, it’s important to know the basic numbers within those calculations:
- Property value: Different counties assess a property’s value with a wide array of different calculations and factors. This is reassessed at least once every five years in most counties and is based on the value of the land and the value of any structures on that land. Property improvements, changing demand, and other factors can all change the assessed property value. For the vast majority of homeowners, this number will rise every year.
- Tax levies: Your property taxes encompass multiple different levies, each at different percentage amounts; primarily, those levies will be: school district taxes, city taxes, county taxes, and taxes for local community or junior colleges. Each county establishes and manages the taxes within their district.
- Property tax amount: This number, at a basic level, is the product of your home’s assessed value multiplied by the tax levy percentage. For example, a $300,000 home facing a 2% tax will have a $6,000 property tax bill. However, the more in-depth calculations break up that formula by tax levy. For example, that same property’s $6,000 tax bill is based on:
- School district taxes at 0.75%: $2,250
- City taxes at 0.5%: $1,500
- County taxes at 0.5%: $1,500
- Junior college taxes at 0.25%: $750
Property tax exemptions generally apply to your home’s value in relation to one or some of the property tax levies (though some provisions may apply to your home’s assessed value as a whole). General resident homestead, senior, and disabled exemptions reduce a homeowner’s school district tax bill. In the example above, for instance, those exemptions would reduce the $2,250 school district tax. This will reduce the total tax bill, but not the portion due from other tax levies.
Related: What is a Homestead Exemption in Texas?
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. The tax reduction can be applied to one property in Texas that the veteran owns, even for 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.
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.
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 official deadline is 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 at their last year in the initial home.
Related: How Do Mortgage Payments Change if Your Taxes Go Up?
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 resident homestead: This will remove $40,000 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.
Commonly many disabled veterans with partial exemptions will also apply for (or automatically receive) a general resident homestead exemption.
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.
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 or to get started reducing your property taxes.