Filing for Homestead Exemption

Homeowners: Don’t forget about this valuable tax benefit!

Homestead exemption allows you to save money on your property taxes by reducing the assessed value of your home.

What is homestead exemption? Homestead exemption is a legal provision that allows a homeowner to protect the value of their primary residence from creditors and property taxes.

Tips & Tricks

-Decreases the assessed value of your home, resulting in a tax break.

-Texas is a nondisclosure state, so don’t share what you paid for your home.

-You can apply online or at your local tax appraisal district .

-1 time application and free to file.

-Cannot increase your taxes more than 10% each year .

Below, you can learn all about Texas homestead exemptions, their basic requirements, and the application process.

What is a Texas Homestead Exemption?

A homestead exemption is a decrease in your property tax or you can think of it as a discount on the value of your house. The tax authorities only consider the home’s market value, so if you qualify for a homestead exemption, you will pay taxes on less of the home’s value.

For example, if your market value is $200,000 and you qualify for a homestead exemption of $10,000, then the tax authorities will only consider the home’s market value to be worth $190,000. You would only pay taxes on this amount instead of paying taxes on the full $200,000.

If you qualify for homestead exemptions, then the tax rate calculated will be on a smaller value which means your taxes would ultimately decrease.

What are the Requirements?

There are two kinds of homestead exemptions available to qualifying homeowners: (1) homestead exemption for school taxes; and (2) homestead exemption for taxes other than school taxes.

Before applying for either, you must first meet the following criteria:

(1) You must own/occupy your home;

(2) Your home must be located in Texas; and

(3) You must be a United States citizen, you must have lived in the State of Texas for the past year, and you must be 18 years or older.

Why You Should Claim Homestead Exemptions in Texas

You will see that your tax rate decreases when you take advantage of homesteads exemptions in Texas. This means that not only are you paying less in taxes, but your property is worth more.

If you want to sell or refinance your house, you will find out that this exemption is calculated when the property value is increased which means lender’s would be more willing to lend money on the home.

Also, you might see that appraisers are more likely to give an offer on your home if they realize that you take advantage of homestead exemptions in Texas.

So if you own property in Texas and want to save money each year on your taxes, make sure to apply for homestead exemptions because everyone qualifies!

How to Apply

Start by requesting the application form from your county appraisal district, your mortgage company, or by downloading the app from your Appstore. You will need to fill out an application each year that you want to claim homestead exemptions.

Make sure to check the box on the application if you are claiming an exemption for school taxes as well as for property taxes. If you file with the state of Texas you will be exempt from school taxes (this only applies to the state of Texas).

You should receive a letter from the appraisal district acknowledging your application and stating whether or not you were approved. In addition, you will also receive a document with the year’s tax rates and, based on what you sent in, you might see that your taxes have been lowered.

Source:(Texas Homestead Exemptions: What Are They and How to Apply - Service First Mortgage (sfmc.com))