As a homeowner, particularly in areas like Austin, Texas, understanding and utilizing homestead exemptions can be crucial to managing your property's finances. The concept of a homestead exemption might seem complex at first, but with a little guidance, you can navigate this process smoothly and benefit from potential tax savings. In this blog post, we’ll delve into homestead exemptions, how to file for them, and the recent changes in the law that might affect homeowners in Texas.
A homestead exemption offers homeowners a way to lower their annual property taxes. Essentially, it reduces the taxable value of your property. For instance, if your home is valued at $500,000 and you qualify for a $20,000 exemption, you’re taxed as if your property is worth $480,000. This reduction can lead to significant savings, potentially amounting to thousands of dollars annually.
A homestead can be a separate structure, condominium, or manufactured home and may include up to 20 acres of land. The key requirement is that the owner occupies the home, and the land is used for residential purposes.
Filing Your Homestead Exemption
In recent years, filing for a homestead exemption has become more accessible, with many counties in Texas, such as Travis County, offering online applications. To file, you need to:
Complete the application specific to your County Appraisal District.
Submit the necessary documents online or by mailing them to the district office. The required documents usually include a copy of your Texas Driver's License or Identification Card with an address matching your homestead.
Recent Changes to Homestead Exemptions in Texas
There have been several notable changes to homestead exemptions in Texas:
May 2022: Williamson County increased property tax exemptions, particularly benefiting homeowners aged 65 and older or those who are disabled.
Proposition 1 and 2 (2022): These measures aim to cut school district property taxes, especially for homeowners above 65 or those with disabilities, and raise the state’s homestead exemption for school districts.
January 2022: A new law allowing homeowners to file for a homestead exemption from the date they begin residing on the property.
June 2021 and November 2015: Significant increases in exemptions for seniors, disabled individuals, and general homeowners in Travis County and statewide.
The Importance of Updating Personal Information
Before applying, ensure that your driver's license reflects your current address. The Texas Department of Public Safety offers online services for address updates, which can be more convenient than in-person visits.
Additional Exemptions and Information
In addition to homestead exemptions, there are other exemptions available to homeowners:
These include exemptions for school taxes, county taxes, optional percentage exemptions, and more. Detailed information can be found on the Texas Comptroller’s website.
Depending on factors such as your age, location, disability, or veteran status, you may qualify for different homestead exemptions, such as:
School taxes: All residence homestead owners may receive a Homestead Exemption from their home's value for school taxes.
County taxes: If a county collects a special tax for farm-to-market roads or flood control, a residence homestead owner may be exempted from this tax. If the county grants an optional exemption for homeowners age 65 or older or to those with a disability, the owners will receive only the local-option exemption.
Age 65 or older and disabled exemptions: Individuals 65 and older and/or disabled residence homestead owners may qualify for a Homestead Exemption for school taxes, in addition to the exemption for all homeowners. If the owner qualifies for both the exemption for 65 and older homeowners and the exemption for disabled homeowners, the owner must choose one or the other for school taxes. The owner cannot receive both exemptions. Click here to read about exemptions, limitations, and special instructions for homeowners aged 65 and over and homeowners with disabilities.
Optional percentage exemptions: Any taxing unit, including a city, county, school, or special district, may offer an exemption of a percentage of a home's value. Each taxing unit decides if it will offer the exemption and at what percentage. 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.
Optional 65 or older or disabled exemptions: Any taxing unit may offer an additional exemption amount for taxpayers age 65 or older and/or disabled.
Disabled veteran homeowners: Click here for more information about exemptions, limitations, and special instructions for disabled veteran homeowners.
Next Steps After Filing
After filing your exemption, you'll receive a preliminary tax assessment, usually around May or June. If you believe your property’s assessed value is too high, you can protest this value. It’s helpful to have a list of recent home sales in your neighborhood as evidence during this process.
Filing for a homestead exemption in Texas is a valuable step for homeowners looking to reduce their property tax burden. With recent legal changes and the availability of online filing options, the process has become more streamlined. As always, staying informed and ensuring your documentation is up to date will make the process smoother.
Below are the links to the county sites where you can access the applicable forms to apply for your exemption(s). It's vital that all your documents display the same address.
TRAVIS COUNTY APPRAISAL DISTRICT | www.traviscad.org
Mailing Address: P.O. BOX 149012, Austin, TX 78714
WILLIAMSON COUNTY APPRAISAL DISTRICT | www.wcad.org
Mailing Address: 625 FM 1460, Georgetown, TX 78626
HAYS COUNTY APPRAISAL DISTRICT | www.hayscad.com
Mailing Address: 21001 IH 35 North, Kyle, TX 78640
Bastrop COUNTY APPRAISAL DISTRICT | www.bastropcad.org
Mailing Address: P.O. BOX 149012, Austin, TX 78714
CALDWELL COUNTY APPRAISAL DISTRICT | www.caldwellcad.org
Mailing Address: P.O. BOX 900 Lockhart, TX 78644-0900
As a reminder, Texas is a non-disclosure state. You DO NOT have to provide the county with a copy of your closing statement. However, if the home's appraised value is more than your purchase price, you may find it advantageous to use the closing statement to support your protest.
Property Protest Companies:
These are companies that you may hire to file an appraisal protest. The process of protesting is difficult to navigate, and we have heard from colleagues and clients who have protested on their own behalf, having very little success at lowering their assessed market value.
If you do choose to protest on your own, we recommend contacting the Taxpayer liaison in your county.
At Berbas Group, we understand the nuances of real estate ownership and are dedicated to helping our clients navigate these complexities. Whether you're a new homeowner or need guidance on property tax exemptions, our team is here to assist you every step of the way.
If you have additional questions, please call us at 512-655-3830.
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