Texans take note: Your state has one of the most generous property tax exemptions in the nation. Are you taking advantage of it? If you’ve not yet filed for the Texas homestead exemption, you could be missing out on significant savings.
Property taxes are a fact of life no matter where you live—and Texas has one of the country’s highest property tax rates.
Texas is one of just a handful of states with no personal income tax. Cities and counties in the Lone Star State must rely heavily on property tax revenue to pay for public services. With the median property tax having increased by more than 25% in the past several years, it’s not surprising that many local property owners are looking for relief in any form.
Enter the Texas homestead exemption. For Texas homeowners who qualify, this property tax exemption will have a sizable impact on your annual tax bill. In this article, we’ll cover everything you need to know about the exemption so you can take your first step toward savings now.
Getting an exemption has never been easier—let Ownwell handle it for you! See your potential savings now to get started.
What is the Texas homestead exemption?
In short, the Texas general residence homestead exemption excludes (“exempts”) a portion of your property’s value from taxation. The result of this exemption is a lower assessed value and—by extension—a lower annual property tax bill.
The general homestead exemption, provided for in section 11.13(b) of the Texas Tax Code, has two components:
- A mandatory public school district exemption. State law requires all Texas school districts to exempt from taxation some portion of the value of qualifying properties—in this case, a homestead, which can include up to 20 acres of land. A recent 2023 law brought the current exemption amount to $100,000.
- A local option exemption. Localities may also choose to offer an additional exemption from city, county, or school taxes ranging from $5,000 (minimum) to as much as 20% of a property’s value.
The general homestead exemption alone is highly beneficial for homeowners, but if you fit into any of the categories below you may also qualify for additional exemptions:
- Homeowners age 65 or older
- Disabled people
- Disabled veterans
- Surviving spouses of first responders killed or fatally injured in the line of duty
Eligibility Criteria
Now on to one of the most important questions: Are you eligible to receive the Texas homestead exemption?
You are eligible for the general homestead exemption on your property if you can meet the following criteria:
- The property is your primary residence. That means you live there for the majority of the year AND it is the address listed on your driver’s license and tax returns. Note that any type of permanent residence could potentially qualify, including mobile homes, condos, etc.
- You have an ownership interest in the property (even partial).
- You haven’t claimed a residential exemption on another property, in Texas or elsewhere.
If you’ve met the three items above, congrats! You’re eligible for the general homestead exemption.
Now, see if any of the other exemptions apply. In addition to meeting the requirements above, are you:
- Age 65 or older? Senior homeowners may be eligible for an additional $10,000 residence homestead exemption. (Note that a surviving spouse who is 55 or older may still qualify if the deceased spouse died in a year they qualified for the exemption.)
- The unmarried surviving spouse of a first responder killed or fatally injured in the line of duty? If so, you may be eligible for a total property tax exemption.
- A disabled veteran or the surviving unmarried spouse or child of a disabled veteran? If so, you may be eligible for a partial or total property tax exemption depending on your disability rating as issued by the U.S. Veterans Administration.
- A disabled person? If you meet the requirements of the Social Security Administration’s definition of a disabled person, you may be eligible for an additional $10,000 homestead exemption.
Texas residents have access to a number of potential property tax exemptions. If you stay on top of the changing requirements and put in the time to apply, you can reduce this annual financial burden significantly.
So, what’s he simplest way to take advantage of the Texas Homestead Exemption and lower your tax bill? Signing up with Ownwell!
Our team of local experts knows understand Texas property taxes inside and out, and we’ll make sure you don’t leave any money on the table. We work directly with your county officials to ensure your Homestead Exemption paperwork is processed and applied correctly to your next tax bill. We’ll also help you get any tax refunds you might be owed from previous years.
Clearly our methods work—on average, our customers save $1,973 a year! To get an estimate of your own potential savings, simply answer a few short questions here.
Benefits of the Texas Homestead Exemption
Receiving an exemption on your property immediately benefits you as a homeowner because it reduces the taxable value of your property. In the case of the homestead exemption, that means qualifying Texas property owners’ home valuations will be reduced by $100,000 or more when it comes time to calculate the tax bills. That, in turn, produces savings on your annual tax bill.
A quick refresher…
Property taxes are calculated by multiplying your property’s assessed (appraised) value by your locality’s tax rate.
So a home in Travis County, for instance, valued at $600,000 would only be taxed on $500,000. With a local tax rate of 1.77%, this exemption means the difference between a $8,850 tax bill and a $10,620 tax bill. Most homeowners will save between $1,250 and $1,450 each year as a result of this latest tax break. The amount of your savings depends on the value of your home and your total property tax exemptions.
Another benefit of having the exemption is that your property’s assessed value will be protected against steep yearly increases of more than 10%. That’s thanks to the homestead cap, which applies to any property with an exemption in place at least for the previous year.
Is it worth the effort to pursue this exemption? Absolutely! The savings will add up significantly over time. And as property values continue to rise, you’ll only benefit more. Property taxes are a major expense for every homeowner—why pay more than you have to?
How to Apply for the Homestead Tax Exemption
Two very important pieces of information to note about this exemption:
- You must apply in order to receive it—the exemption is not automatic!
- As of September 2023, you must renew your application every five years.
The process for applying varies slightly from one county to the next, so it’s always a good idea to refer to your local appraisal district website for specific instructions. In most cases, though, the first step is to complete the Residence Homestead Exemption Application, form 50-114. A link to this form is available on the Texas Comptroller’s website.
You’ll also need an image of your Texas driver’s license to submit along with the form. (If there’s an additional owner, you’ll need a picture of theirs, too.) Make sure the address listed on your license matches the one on your application.
Once everything is complete, submit the documents to your county’s appraisal district office anytime after January 1 and before April 30. Most offices allow you to submit applications online, by mail, or in person.
If you’re the heir of a deceased property owner and have acquired the property through a will, you’ll need to provide additional documentation. The same is true for the other types of exemptions (disabled veteran, surviving spouse, etc.). Check with your local appraisal district to see what documents are needed.
Once you’ve submitted your application, the chief appraiser of your district will make a determination as to whether your property qualifies for an exemption. You can expect to get a response within 90 days of your application. If they need more information, they are required to let you know within 30 days; you then have 30 days to provide it. Keep in mind, too, that you have the right to protest their decision should you be denied.
The recent change to the homestead exemption requires chief appraisers to verify the eligibility of exempted properties every five years. This means you’ll need to reapply at the end of each five-year cycle. Since this is a new requirement as of 2023, reapplication processes in some counties may still be in flux. The best advice is to check with your local appraisal district for instructions, and stay on top of your own renewal cycle.
Texas Homestead Exemption FAQs
1. What if I move to a new home?
You’ll still be eligible to apply for the exemption. However, you may only be entitled to a portion of it based on the amount of the tax year that remains once you’ve been approved. (If the previous owner had applied for and received an exemption, you may still receive the full amount.)
Note that if the move is only temporary—for instance, if you’re being relocated for a temporary work assignment—you can continue to claim the exemption on your primary residence for up to two years as long as you don’t apply for an exemption on the second property. Members of the military may be away for more than two years and still receive the exemption.
2. Can I have multiple homestead exemptions?
No. Remember, the homestead exemption is for your principal residence only—you can’t have two of those!
3. Does my eligibility change over time?
Although the new law requires verification every five years, it isn’t likely that your eligibility will change. If you can still check off all the boxes noted previously in this article, you’ll still qualify for the Homestead Exemption each time you apply.
4. What happens if I miss the application deadline?
Good news: You can still apply for up to two years after the deadline for filing has passed. (When filing, be sure to check the box at the top of the form asking if it’s a late application.) If you’re approved and have already paid your tax bill, you’ll get the appropriate refund. If the bill has not yet been paid, it will be reduced to reflect the remaining taxes owed.
5. Can the exemption be revoked?
Yes. The Comptroller’s office has the right to ask for additional information to verify your property’s qualifications at any time. If your circumstances have changed and the property no longer qualifies, the exemption could be revoked.
Ready to take advantage of this savings opportunity?
If you’re a Texas resident and you haven’t yet applied for the homestead exemption, what are you waiting for? It’s an excellent way to lower your property tax obligations and save money for the future.
At Ownwell, we’d love to help you get the process started. It takes less than five minutes to see if you qualify for a homestead exemption. If you do, we can handle the entire process for you, from filing the application at your local office to pursuing any refunds you may be owed. We’ll also monitor your exemption status in future years so you never lose out on savings. And if we don’t find you savings, you don’t pay us anything—it’s as simple as that. Get started today!
