With the rising cost of everything, saving on property taxes is more important than ever. Keep hard-earned dollars in your pocket by filing for property tax exemptions available to you this tax season.
In Texas, real estate taxes are assessed and administered by local officials. Both real and personal property are taxed in proportion to their appraised value, except in cases where Texas' Constitution authorizes an exemption. One such instance is the over 65 homestead exemption.
Eligibility Criteria for the Over 65 Homestead Exemption
The Texas 65 and over homestead exemption provides a partial tax break to eligible homeowners 65 and older. It works by exempting a fixed dollar amount of your residential property's appraised value from being subject to property taxes.
A 2023 amendment to the Texas Constitution requires school districts to provide a $100,000 residential homestead exemption on qualifying residential properties. For example, the owners of a house appraised at $300,000 only pay taxes on $200,000 of the home's appraised value under the general residence homestead exemption.
Important Qualifications for Seniors
The Texas homestead exemption for those over 65 can be stacked on top of the general residence exemption, resulting in significant savings. If you qualify, you're eligible for an additional $10,000 tax break via the over 65 homestead exemption when:
You or your spouse is 65 or older
Your home meets the definition of a residence homestead
You have an ownership interest in the property, and it's your primary residence
You cannot claim an exemption on another residence homestead in or outside of Texas
Local Tax Exemptions
When you apply for and receive the homestead exemption over 65 in Texas, other local taxing units have the option of providing additional exemptions of no less than $3,000 of the total appraised value of your home. This will vary by county. We recommend contacting your local tax authority.
Surviving Spouses
A surviving spouse age 55 or older may be eligible to claim the over 65 homestead exemption if their deceased spouse was at least 65 and died in a year that they would have qualified. The home in question must be the surviving spouse's primary residence.
Homeowners Over 65 With Qualifying Disabilities
Property owners over 65 with a qualifying disability may claim an additional $10,000 in disabled exemptions in the same year as long as they aren't from the same taxing unit. Note that receiving disability benefits does not automatically qualify a property owner for tax relief.
Veterans in Texas may qualify for more relief, depending on their VA disability rating.
How to Apply for the Exemption
In order to receive the Texas 65 and over homestead exemption, you must apply for it.
Chief appraisers in each appraisal district determine whether a property qualifies for an exemption. You can file exemption applications with the appraisal district in the county where the property is located.
Necessary Documentation for Application
You will need to gather the necessary documentation before heading out to apply for the over 65 homestead exemption:
Complete a Residence Homestead Exemption Application
Attach a copy of each property owner's Texas-issued driver's license or state-issued personal identification certificate
Fees and Deadlines for Application Submission
The filing deadline for a Residence Homestead Exemption is April 30. Late applications for disabled homeowners or those 65 and older may be filed up to two years after the initial filing deadline passes.
There are no fees associated with filing an application.
Ownwell can help if you need help filing retroactively for the two years you've potentially missed on homestead exemptions.
Maintaining the Exemption After Moving
Texas statute imposes a tax ceiling when you qualify for either the over 65 or disabled person exemption. It's a maximum dollar amount determined by your local school district that caps your contribution to school taxes.
Request or complete a Tax Ceiling Certificate from your appraisal district. It may help reduce your property taxes in the future if you move.
What Happens if You Move or Rent the Property?
If you reside in your home as of January 1, you can receive a Texas homestead exemption. In certain circumstances, a property owner may be able to claim an exemption for a home they moved into prior to January 1 if the previous owner did not also receive the same exemption for that tax year.
You can still apply for an exemption in Texas if you move temporarily from the residence and:
You don't establish another primary residence.
You intend to return to the property
You're away for less than two years.
Even if you rent out part of your home, the exemption still applies to the entire property if you use some portion for residential purposes.
Common Mistakes to Avoid
Property tax exemptions in Texas can be complicated, leading to common mistakes. Here are some things to know before filing:
1. Update Your State-Issued Identification
Before heading to your local appraisal district office, be sure that the address on your driver's license or personal identification certificate matches the address for which you're requesting an exemption. Residents who have recently moved will be turned away if their exemption application doesn't match their ID information.
2. Only Apply Once
You only need to apply for a Texas homestead exemption once unless:
You move to a new residence within the state
You are applying for additional exemptions like the over 65 or disabled person exemptions
Your appraisal district requests that you apply again due to periodic record audits
3. Understand the Homestead Cap
Beginning during the second full year in which you own the same property, Texas implements a homestead cap. It limits assessed value increases to 10% per year, regardless of increases in market value. You cannot transfer the homestead cap of a property with new ownership.
It might be wise to delay any remodeling or upgrades during the first year of ownership since any new additions or improvements will be assessed at full market value.
FAQs
Can the exemption be transferred to another property?
Yes. When you move from one home in Texas to another Texas residence, you may take your residence homestead exemption credit with you.
What if my income changes after obtaining the exemption?
Residence exemptions in Texas are not based on income. They are based on the assessed value of the property.
How does the exemption affect property tax calculations?
Qualifying homeowners in Texas receive a $100,000 property tax exemption. Homeowners over age 65 may be eligible for an additional $10,000 deduction through the over 65 homestead exemption and an additional $3,000 in some counties.
Filing Help
Property owners often require assistance to interpret complicated exemption statutes and with filing necessary applications. Seek help from the qualified property tax consultants at Ownwell. Our stress-free and cost-effective solutions empower you with the tools, resources, and information to:
Save money
Retroactively file exemptions you missed
Reduce your home utility bills without changing providers
Sign up today to experience the savings and convenience of working with a company you can trust.
