In Property Tax Texas, Real Estate Tax

There are several ways to gain exemptions on your property taxes. However, there is a specific exemption in the state of Texas that is especially close to our hearts: The Homestead exemption.

What is a Homestead Exemption?

By definition, a homestead can be a separate structure, condominium, or manufactured home that is located on presently owned or leased land. This property is considered a homestead as long as the individual living in the home owns the property.

When the word homestead comes up in conversation, the common mental image of what a homestead is a sprawling piece of land on a prairie where are log cabin resides among the country shrubbery. Now, this is something that could easily be a homestead in the state of Texas, but not all homesteads are the same. In fact, homesteads come in many shapes and sizes.

Homesteads can be as large as 20 acres and counts as a homestead if the land is used for a purpose that is relative to the residential use of the homestead; i.e. a ranch with animals used for farming purposes.

How are Homesteads Exempt in Property Taxes?

There are several benefits for owning a homestead when it comes to how the property impacts your property taxes. When you own a homestead, there are several different types of exemptions that you may receive.

School Taxes

A residence that qualifies for the homestead exemption, will receive a reduction in the assessed value.  However, each school district determines the exemption amount but $25,000 is common.

County Taxes

County taxes are also reduced by homestead exemptions.  For most counties, this type of exemption results in a 20% reduction in the assessed value but may vary by county.  County taxes typically involve county hospitals, colleges, and related county wide services. You can ask your property tax consultant to learn more about this.

Do Homeowners Count in this Property Tax Break?

As a Texas homeowner, you are eligible to apply for a homestead exemption on your residence. This removes part of your home’s value from taxation, therefore, lowers your ultimate taxes. Keep in mind that not all homes qualify for a homestead exemption, and in order to qualify, they must meet the definition of a residential homestead.

This means that:

  • You cannot be a corporation or other business entity owning the property
  • The home is used as your permanent residence in the filed tax year
  • You are not claiming a homestead exemption on another property

In order to qualify for the homestead exemption, you must file an Application for Residential Homestead Exemption with your appraisal district. You may file for any homestead exemption up to two years after the delinquency date of a tax year, which in most counties is normally February 1st.

How Does this Exemption Affect Persons 65 or Older?

This tax exemption is especially kind to homeowners aged 65 or older or who are disabled residence homestead owners. In addition to the amounts offered by the homestead exemption, these homes owners also qualify for:

  • A tax ceiling on the school taxes which prevent them from increasing in all future years

Also, for citizens in this category, any taxing unit may offer addition exemptions for taxpayers in the age bracket or disabled demographic.

The Hegwood Group Answers Your Homestead Questions

If you think that you are sitting on a homestead eligible property and want to apply for your homestead exemption, The Hegwood Group is here to help. Get in touch with us today to find out how our services can help you get the exemption that you need.

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