If you are a homeowner or home buyer in Texas, you have probably heard of homestead exemptions. Well you’ve come to the right place! Below, you can learn all about Texas homestead exemptions, their basic requirements and the application process.
What Is a Texas Homestead Exemption?
At its core, a Texas homestead exemption is basically a tax break for qualifying homeowners. It’s one of the many perks of buying and owning a home in the Lone Star State. You may apply for homestead exemptions on your principal residence. Homestead exemptions remove part of your home’s value from taxation, so they lower your taxes.
Property owners may qualify for a general residence homestead exemption, for the applicable portion of that tax year, immediately upon owning and occupying the property as their principal residence, if the preceding owner did not receive the exemption that tax year. Requirements are a Texas issued Driver License or Identification card showing your current physical address.
Prior to January 1, 2022, homestead exemptions could not be filed until the year after a home was purchased. As of 2022, homeowners may file for a homestead exemption immediately upon closing on their property, so long as an exemption has not yet been filed for that tax year.
Who is eligible for a homestead exemption?
To qualify, a home must meet the definition of a residence homestead: The home’s owner must be an individual (for example: not a corporation or other business entity) and use the home as his or her primary residence on Jan. 1 of the tax year. (in Texas you cannot file Homestead Exemption for multiple properties)
Homeowners who qualify for a general residence homestead exemption are also eligible for the following exemptions if they meet these criteria:
- Over 65 exemption: For homeowners 65 and older. If you are over 65 when you die, your surviving spouse 55 or older will get your over-65 exemption.
- Disability exemption: For homeowners (not their children) who have a disability that would qualify for Social Security Disability benefits. If you are a senior and have a disability, you can take only one of the exemptions.
- Veteran exemption: For veterans who have a disability, their spouses and survivors, and spouses and survivors of military personnel killed on active duty. The amount of the exemption depends on the percentage of service-connected disability. 100% disabled equals 100% exemption.
How do I apply for a homestead exemption?
To apply for a homestead exemption, you need to submit an application with your county appraisal district. The application can be found on your County Appraisal District website or using Texas Comptroller Form 50-114. Most counties allow for online filing through their County Appraisal District website, the website information can be found on your Property Tax Statements (these are mailed out in October) or by visiting your County Appraisal District website. Filing an application is free and only needs to be filed once.
To learn more you can refer to the “property tax exemptions” section of the Texas comptroller’s office. Their site offers more information on the topics covered in this article, along with a helpful FAQ section. All forms and other information can be found on the Texas Comptroller website. If you are looking for information on your appraisal district click this link and find your county.
When do I apply for a homestead exemption?
You can file the application for a homestead exemption at any time. If your application is postmarked by April 30th, the exemption can be processed in time for your property tax bill that comes out in the fall. If you file after April 30th, the exemption will be applied retroactively. You can also apply anytime for the over-65 or disabled person exemption after you qualify for the exemption; the exemption will be applied retroactively if you file within a year of turning 65 or becoming disabled.
Do I still qualify for homestead exemption if I don’t live in the property?
If you temporarily move away from your home, you may continue to receive the exemption if you do not establish a principal residence elsewhere, you intend to return to the home, and you are away less than two years. You may continue to receive the exemption if you do not occupy the residence for more than two years only if you are in military service serving inside or outside of the United States or live in a facility providing services related to health, infirmity, or aging.
What happens if I don’t pay my property taxes?
If you do not pay your property taxes, the county can put a lien on your homestead and foreclose on your home unless you have qualified for a deferral. After foreclosure, you have two years to buy back your home. Homeowners with an over-65, disability, or disabled veterans exemption are eligible for a deferral from property taxes until they die or until the home is no longer their primary residence, at which time all the taxes are due unless the person’s heirs also qualify for a deferral. Interest on the deferred taxes accumulates at an annual rate of eight percent and is due at the same time as the taxes. If you are eligible, you can apply for a deferral from your county appraisal district. You should first check with your mortgage company to ensure your deferral won’t violate your loan terms.
Can I ask for a payment plan to pay my property taxes?
You may be able to ask for a payment plan to pay your property taxes. When a person with a homestead exemption is delinquent in the payment of taxes, the tax collector is required to enter into a repayment installment plan of 12 to 36 months if the homeowner requests a plan, as long as the homeowner has not entered into a plan in the prior 24 months. Interest accrues at 12 percent a year. Persons with an over-65, disability, or disabled veterans exemption can spread out their tax payments over a year in four installments without penalty or interest. To use the installment payment plan option, you must include a notice about this with your first payment.
What is the difference between a Deferral and an Exemption?
An exemption lessens the taxes you owe. You must still pay any remaining taxes on time.
A deferral allows you to put off paying taxes you owe. It does not lessen the taxes you owe, and interest may accrue.
Have real estate questions? Waco First Home Buyers serves Texas. Our experienced team can answer any real estate related questions you have and guide you through the process. We look forward to hearing from you!
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