Texas is ranked eleventh in the nation for the highest median property tax bills. The state relies heavily on property taxes because it has no sales tax, which gives local governments more say in how funds are spent. If you own a home or property, you must know how to reduce property taxes in Texas to keep more money in your pocket.
Understand the Types of Property Tax Exemptions Available
To help offset the burden on taxpayers, Texas offers several property tax exemptions. These are some of the simplest ways to reduce your property taxes. There’s the general state-wide homestead exemption and several additional ones you may qualify for.
Homestead Exemptions for Primary Residences
If you use your property as your primary residence, you may qualify for a $100,000 property tax reduction on your school taxes through the general homestead exemption.
Agricultural Exemptions for Farmland
If your land is used for agricultural purposes and has been for at least five of the previous seven years, you may qualify for an additional exemption.
Wildlife Exemptions for Conservation Lands
There is an additional wildlife exemption if your property is used to help native Texas wildlife and its natural habitats survive. You must have an approved wildlife management plan to qualify.
Determine Eligibility for Exemptions
A general homestead exemption lowers the assessed value of your home to reduce your tax liability, but there are criteria you must meet to qualify.
Criteria for Homestead Exemptions
There are two main criteria for homestead exemption qualification. You must use the property as a principal residence, and you must own the property. You can only claim the homestead exemption on one property, and you must own the property before January 1 of the year you’re applying for.
Additional Benefits for Seniors and Disabled Individuals
Along with the basic homestead exemption, seniors and disabled individuals are offered other exemptions. Anyone over 65 is eligible for an additional exemption of up to $10,000 on their school district's taxes. There's also a local option exemption for seniors that can’t be less than $3,000.
If a disabled person meets the definition of disabled under the Social Security Administration’s Federal Old-Age, Survivors and Disability Insurance Act, they also qualify for an additional exemption. Unfortunately, you can’t qualify for the exemption for both senior and disabled individuals. You can only have one at a time. There is also an additional exemption if you are a disabled veteran.
Application Process for Property Tax Exemptions
All of the exemptions mentioned above are one-time applications. However, in 2023, a new state law (Texas Property Tax Code 111.43 (h-1)) requires counties to verify homestead exemptions once every five years.
Some exemptions not mentioned, such as property tax abatement, historical and archeological sites, and low-income housing, require that you file an application every year.
How to Apply for Homestead Exemptions
You must apply for the Texas homestead exemption through your county. To do so, fill out the General Exemption Form 50-114. You only need to apply once.
Deadlines for Exemption Applications
The deadline for exemptions is usually April 30 in the year the exemption is requested, although there are cases where you can retroactively file for years missed.
Retroactive Claims for Missed Deadlines
Have you missed the homestead exemption but are still looking for ways to reduce property tax in Texas? The good news is that you can retroactively apply for the exemption for up to two previous years. At Ownwell, we help you handle this process.
Filing a Notice of Protest
Texas tax code requires appraisal districts to reappraise all property in their jurisdictions at least once every three years. However, the vast majority do so annually. These large appraisals don’t always take into account your unique property features, which can affect the assessed value and leave you with a higher tax bill.
When you receive your property’s appraised value and tax statement in April or May, and you disagree with the amount, there’s a process to protest it.
Protesting property taxes in Texas requires attention to detail and preparation. Ownwell has helped many homeowners and businesses save money over the years. For example, we recently saved a developer over $65,000 on their tax bill by arguing that the income method used by the county was inappropriate for a partially completed property. Over the years, we've found that market values for those who protested the year before are often lower than for those who didn't.
Requirements for Filing a Protest
To file a protest, fill out the Notice of Protest Form (Form 50-132) and send it through certified mail with a receipt. This form includes the following information:
Address, contact information, and property description
Appraisal district’s account number
Property value based on your opinion
Reasons you’re protesting
Preferred method of notice (certified mail, mail, or email)
Preferred type of hearing (written affidavit, telephone, or in-person)
Signature
Timeline for Submitting a Protest
Your protest must be submitted either within 30 days of receiving your appraisal letter or by May 15, whichever occurs later. Remember that the time period starts immediately after the letter is mailed, not when you receive it. You can file a late property tax protest if you are traveling for work or serving in the military.
Preparing for a Property Tax Protest Hearing
Two weeks before your hearing, you’ll receive the notice of the hearing date and time, a copy of the Comptroller pamphlet, a copy of the Appraisal Review Board (ARB) procedures, and notification that you have access to any information the district plans to use at your hearing.
Informal Hearings vs. Formal Hearings
An informal hearing can be done between you and your county assessor or appraiser. When you present your evidence, you may settle with them without a formal hearing.
A formal hearing is held before the ARB, and each party must produce evidence to prove its point. The ARB often consists of local citizens who issue a decision after the meeting. If you still don't agree, you have the option to challenge the matter in district court or binding arbitration, but let's focus on what you can gain from a formal hearing first.
Gathering Evidence to Support Your Case
Come to your hearing prepared to increase your chances of success. The district will provide you with any information they used to appraise your property. You can counter the amount with any of the following:
A professional appraisal from a qualified real estate appraiser
Comparable sales data of homes similar to yours in your area
Signs of deterioration or property damage to your property that may reduce its value
Documentation of the sales price if you bought it within the previous three years
Photographs, insurance records, sworn witnesses, official notices of the property, or assessment comparables.
According to Sam Sosa, our Senior Property Tax Consulting Manager, the most convincing action you can take is this:
To increase your chances of a successful property tax protest in Texas, I'd strongly encourage securing a copy of the appraisal district's evidence packet. Not only are you legally entitled to it under section 41.461 of the Texas Property Tax Code, but any data the county used to determine the value of your property will be in there.It's safe to say that not all increases in value are created equal.
While some increases are warranted, we see repeatedly that many cases do not fulfill the "clear and convincing" standard the appraisal district is required to meet. — Sam Sosa, Senior Property Tax Consulting Manager at Ownwell.
What to Expect During the Hearing
At the hearing, the panel chairman will introduce the identifying information and protest number. They will verify that the committee kept the information confidential. Any written or electronic material is presented to the chairman, who then swears in witnesses.
As a property owner, you will then present the evidence of your property’s value. You can examine witnesses if necessary and state your opinion about the value. The district then cross-examines any witnesses and may question you, present their own evidence, and introduce their own witnesses.
You can then cross-examine any witnesses the district added, and both parties then make closing arguments. Once the hearing is closed, the panel deliberates. You receive the outcome through certified mail.
Appeal Options for Unsuccessful Informal Appeals
If your protest is unsuccessful, and you and your county appraisal district can't agree upon an assessed value, you can appeal through the State Office of Administrative Hearings and appear before a third-party appraisal review board (ARB). We recommended that you use a tax professional service, like Ownwell, before appealing.
Process for Appealing the Decision
To appeal to the SOAH and appeal before an ARB, file the Notice of Appeal by Property Owner form within 30 days of receiving the information from the board. There is also a deposit of $1,500 that must be paid within 90 days of receiving the result from the district appraiser.
If your property is appraised at $5 million or less or is a residence homestead, fill out the Comptroller’s form for your district, and you’ll be assigned a neutral arbitrator who will make the final decision.
Tips for a Successful Appeal
Read through Tax Code Chapter 41A, learn about property tax bills in Texas, and understand the Comptroller Rules before arbitration. Prepare with strong evidence that you can explain simply. Gather as much information as you can, and read through it thoroughly. Look for comparable sales that match your property as closely as possible. Hire a property tax protest company, like Ownwell, where our software uses the best technology to gather the most impactful data for your case.
Get the Highest Reduction With Ownwell
At Ownwell, we understand Texas property taxes and know how to reduce them. From calculating how much you're overpaying or exemptions you qualify for, we use proprietary software combined with input from local property tax experts to maximize your reduction and savings.
Get started on the path to lower taxes today.
