Everything You Need to Know About Texas Property Tax Exemptions for Homeowners

If you're a homeowner in Texas, you might be wondering how you can reduce your property tax bill. Luckily, there are several property tax exemptions available that can help you save money. In this comprehensive guide, we'll explain everything you need to know about property tax exemptions in Texas.

What is a Property Tax Exemption?

A property tax exemption is a reduction in the amount of property tax owed on a property. In Texas, there are several types of property tax exemptions available to homeowners. These exemptions are designed to provide relief to homeowners who may be struggling to afford their property taxes.

Residence Homestead Exemption

The residence homestead exemption is the most common property tax exemption in Texas. This exemption applies to properties that are used as the owner's primary residence. The exemption amount varies depending on the type of property and the location.

For example, school districts are required to provide a $40,000 exemption on residence homesteads. However, any taxing unit (such as a city, county, school district, or special district) has the option to offer a local option exemption of up to 20% of the property's appraised value, but not less than $5,000. Counties are also required to offer a $3,000 exemption if they collect farm-to-market roads or flood control taxes.

To qualify for a residence homestead exemption, the homeowner must have legal ownership and occupy the property as their primary residence. A residence owned by an individual through a qualifying beneficial trust and occupied by a trustor or beneficiary of the trust may also qualify. An owner's surviving spouse who has a life estate in a residence may also qualify the property for a residence homestead exemption.

Age 65 or Older Exemption

The age 65 or older exemption applies to homeowners who are 65 years of age or older. This exemption provides a substantial reduction in property taxes. In addition to the $40,000 homestead exemption, homeowners who are 65 or older may also qualify for a $10,000 exemption on the appraised value of their property for school taxes. This exemption can be combined with the residence homestead exemption for additional savings.

Disabled Person Exemption

The disabled person exemption applies to homeowners who are disabled. To qualify for this exemption, the homeowner must have a physical or mental disability that prevents them from earning a living. Like the age 65 or older exemption, the disabled person exemption provides a $10,000 exemption on the appraised value of the property for school taxes. This exemption can also be combined with the residence homestead exemption for additional savings.

Optional Percentage Exemptions

Any taxing unit (such as a city, county, school district, or special district) has the option to offer an optional percentage exemption of up to 20% of the appraised value of the property. However, the exemption cannot be less than $5,000. This percentage exemption is added to any other home exemption for which an owner qualifies. The taxing unit must decide before July 1 of the tax year to offer this exemption.

How to Apply for a Property Tax Exemption

To apply for a property tax exemption, you must submit an application to the local appraisal district where the property is located. The application must include proof of eligibility, such as a driver's license or state identification card. The deadline for filing a property tax exemption is April 30 of the tax year for which you are applying. If you miss the deadline, you may be able to file a late application up to two years after the delinquency date, which is usually February 1.

In Conclusion

Understanding property tax exemptions in Texas can help you save money on your annual property tax bill. Whether you're a first-time homeowner or have owned your home for years, it's important to stay informed about the available exemptions and eligibility requirements. Take the time to research and apply for any exemptions you may qualify for, and consult with a tax professional for advice on maximizing your savings. By taking advantage of property tax exemptions, you can keep more money in your pocket and enjoy the benefits of homeownership in the great state of Texas.