Texas Homestead Exemption

Homestead Exemptions in Texas: Application Deadline and New Verification Law

If you have a homestead exemption in Texas, a fairly new Texas law requires appraisal districts to audit your eligibility for the exemption at least once every five years. You may be receiving a letter from your appraisal district asking you to verify your homestead exemption eligibility. Respond promptly!

If you don’t respond, you could lose your exemption, or it will be calculated incorrectly, meaning your property taxes will increase significantly.

If you don’t have a homestead exemption, here’s why you should apply.

What is a Texas Homestead Exemption?

A homestead exemption is a tax exemption that reduces the appraised value of your home to lower your school district property taxes. A homestead is the house and land you are using as your primary residence on January 1 of the tax year. If you own more than one home in Texas, you can only receive a homestead exemption on your primary residence.

If you acquire your property after January 1 of a tax year, you may receive the residence homestead exemption for the portion of the tax year you are in the home, but only if the previous owner didn’t already receive the exemption for that property. If that happens, you can apply for and receive the exemption(s) the following tax year and on.

Available homestead exemptions in Texas include:

• School Taxes – up to $40,000
• County Taxes – specific to tax on farm-to-market roads and flood control
• Age and Disability – individuals 65 or older or disabled
• Local Option Exemption – specific to each individual appraisal district in Texas
• Partial and Full Exemptions for Disabled Veterans – surviving veteran spouses are eligible, too
• Surviving Spouses of U.S. Armed Services and First Responders – 100% exemption if you qualify

How Much a Homestead Exemption Saves You

It depends on the exemption and how many you qualify for, but they can save you quite a bit on your property taxes.

Example:

Let’s say the appraised value of your home is $300,000 and you qualify for $120,000 of exemptions. The new taxable value of your home becomes $180,000. If your total school district tax rate is 1.0509, you’ll pay $1,492 in school district taxes instead of $3,153. That’s a savings of more than $1,600. If you escrow your mortgage, this lowers your mortgage payment by $138.41 a month.

How To Get a Texas Homestead Exemption

Obtaining your Texas Homestead Exemption is a simple application process. Complete this application, and submit it to the appraisal district in the county where your property is.

You only have to submit the application once, and it will renew automatically each year. However, Texas law requires your appraisal district to verify your exemption eligibility at least once every five years. When you receive your reminder letter, respond promptly or you could lose your exemption. If you are applying for the first time, you probably won’t receive a letter for five years.