Texas Homestead Property Tax Exemptions, Defined.

By Troy Corman, www.t2realestate.com

One of the great advantages of home ownership are all of the great tax deductions. This includes the amount you pay for your Texas property taxes. With the highest property taxes in the nation, Texas home owners would be remiss to not take advantage of  the Texas Homestead Tax Exemptions. Let’s find out how to do so below.

Texas defines a homestead as a person’s principal residence. It must be owned by an individual, not a corporation. To qualify for the homestead tax exemption, the home must be used as your principal residence on January 1 of the tax year.

It can be a separate structure, condominium or manufactured home located on owned or leased land as long as the individual living in the home is the home’s owner. A Texas homestead can include up to 20 acres if the land is owned by the home owner and is used, in some manner, for residential use.

The homestead exemption in Texas provides for a $15,000 school tax exemption from your home’s value. So, if you’re home was valued by the county appraisal district at $100,000 – it would be taxed at a value of $85,000. The exemption can include county taxes as well, if your county collects a specific tax for farm-to-market roads or flood control, for instance.

Individuals 65 years of age or older, and disable homestead owners may qualify for an additional homestead exemption of $10,000 for school taxes. If you qualify for either of these exemptions, a homestead tax ceiling is created in the year that you qualify. This means that the school taxes on your home cannot increase as long as you live in the home. The taxes could go below the ceiling, but never above it unless you markedly improve the value of the home. If you add a garage or extra square footage to the home, the ceiling will be adjusted to the home’s new higher value.

To qualify for a disabled person’s exemption, you must meet the Social Security definition for disabled.

If you temporarily move out of your home, you will still qualify for the homestead exemption as long as you move back within 2 years, and you don’t establish a principal residence elsewhere.

Optional exemptions may apply to your home. Any taxing unit including a city, county, school or special district may offer an exemption up to 20% of a home’s value and the exemption must be at least $5,000. An optional exemption may also be available for the 65 and older and disabled homesteaders. This exemption can be provided by any of the previously mentioned taxing units above, but the tax exemption must be at least $3,000.

To qualify for the Texas homestead exemption, you must live in the home January 1 of the tax year and must file for the exemption within one year after the property taxes are due. Once you receive the exemption, you do not need to reapply. However, you should inform the appraisal district in writing if you move or no longer qualify for the exemption.

To file for the Texas homestead tax exemption or to get more information, find your Texas county appraisal district here.