Texas Homestead Exemption
If you’re a Texas homeowner, you’ve probably heard about the Texas Homestead Exemption. Since Texas doesn’t have a state property tax, it is up to the local counties to administer and assess property taxes. These property taxes account for most of the local government income that pays for community resources such as schools, police and firefighters, roads, libraries and city parks.
The state of Texas offers a number of total, or absolute state property tax exemptions from property values that are used in determining local property taxes. Partial exemptions, such as the Texas Homestead Exemption, are those that remove either a fixed dollar amount or a percentage of the appraised value from the property’s value from the property tax. A total exemption will exclude the entire property value from taxation. The state offers mandatory exemptions, while local governments have the option to offer additional property tax exemptions.
The most common exemption used by homeowners in Texas is the Homestead Exemption.
What is a Texas Homestead Exemption?
A Texas Homestead Exemption is an exemption offered to homeowners on their primary residence and requires that school districts offer a $25,000 exemption on the residence. Additionally, local government is also provided the option to offer a separate residence homestead exemption of up to 20% of the property’s appraised value, but not less than $5,000. For counties that collect flood control or farm-to-market taxes, there is a requirement to offer a $3,000 homestead exemption as well.
A standard Homestead Exemption would provide a minimum of $25,000 (the mandatory school district exemption) from the appraised value for an approved principal residence. This means that if a home were appraised for $100,000, the school taxes on the residence would be based on a value of $75,000.
An additional exemption of $10,000 is available to homeowners over the age of 65, or owners with a disability, in addition to the $25,000 mandatory school tax exemption. A homeowner who is both over 65 and listed as disabled is only eligible to receive one additional exemption.
What qualifies as a Homestead?
A property qualifies as a homestead if it is a separate structure, manufactured home, condominium or town home that is owned by the individual living in the property as a primary residence. In Texas, a homestead can include up to 20 acres of land, provided the homeowner owns it and it’s used in a way related to the residential use of the property.
What are the requirements for a Texas Homestead Exemption?
The only requirements to qualify for a Texas Homestead Exemption are that the owner has an ownership interest in the property and uses the property as their principal residence. The applicant must also not claim a homestead exemption on a residence outside of Texas. A Texas Residential Homestead Exemption Application must be completed and include a copy of a state identification card (driver’s license or other state approved form of identification) with an address that matches the residence of the application. This does not apply to owners with a listed address of a facility that provides health services, such as a nursing home or long-term medical care facility. The chief appraiser may also waive this requirement for active duty U.S. armed service members or their spouse if the application includes a copy of military identification and a utility bill for the residence listed on the application.
The homeowner will not lose the homestead exemption provided the owner does not establish a different principal residence and intends to return to the property after being absent from the residence for a period of less than two years.
In the case of co-owners, homestead exemptions will only apply to the percentage of the interest owned by each individual. For example, if an individual has a 50% interest in a property, they will receive an exemption of $12,500.
How do you submit an application for a Texas Homestead Exemption?
Homeowners must submit an Application for Residential Homestead Exemption with their appraisal district up to one year after the taxes of the homestead are due. The general deadline for filing an exemption application is before May 1. Once the homestead has been approved, the homeowner will not need to reapply for the exemption unless contacted by their district’s chief appraiser. If the homeowner relocates they must inform the appraisal district in writing before the next May 1st.
How much does a Texas Homestead Exemption cost?
There is no fee for submitting a Texas Homestead Exemption application, and new homeowners should never pay for submitting an application. If you receive anything in the mail suggesting otherwise, you should disregard and visit your local appraisal district’s website for full details about the exemptions in your county and any applications or contact information.
Dallas/Fort Worth area appraisal district contact information:
A full list of Texas County Appraisal District contact information can be found on the Texas State Comptroller’s website.