Most Texans agree that property taxes are too high. And although future tax relief appears murky and uncertain, there are exemptions all Texas homeowners can follow to lower the cost of their property taxes.
In the state of Texas, property taxes are locally assessed and locally administered. These taxes pay for schools, roads, libraries, police and fireman, parks, and any other service provided by the local government. What the state does provide are exemptions for certain property owners.
These exemptions come in all shapes and sizes. There is one though, that stands among the rest as all homeowners in Texas are eligible.
So, what is it?
The homestead exemption.
Homestead exemptions remove part of your home’s value from taxation, so they lower your taxes. For example, if your home is appraised at $192,400, the median home cost in Dallas, then you can qualify for a $25,000 exemption (this is the amount mandated for school districts). And this would mean that you would pay school taxes on the home as if it was only worth $167,400.
In the state of Texas, there are two ways your home qualifies for an exemption. First, you must own it, and second, it must be your principal place of residence each January, which is when the county assesses annual property taxes.
The homestead exemption is special because it gives all Texas property owners the opportunity to receive a $25,000 exemption from their home’s value. But this isn’t the only opportunity homeowners have to receive relief. Below is a quick list of homestead exemption opportunities the state of Texas provides to its property-owning citizens:
Age 65 or older and disabled exemptions: Individuals age 65 or older or disabled residence homestead owners qualify for a $10,000 homestead exemption for school taxes, in addition to the $25,000 exemption for all homeowners. If the owner qualifies for both the $10,000 exemption for age 65 or older homeowners and the $10,000 exemption for disabled homeowners, the owner must choose one or the other. The owner cannot receive both exemptions.
County taxes: If a county collects a special tax for farm-to-market roads or flood control, a residence homestead is allowed to receive a $3,000 exemption for this tax. If the county grants an optional exemption for homeowners age 65 or older or disabled, the owners will receive only the local-option exemption.
Optional percentage exemptions: Any taxing unit, including a city, county, school, or special district, may offer an exemption of up to 20 percent of a home’s value. But, no matter what the percentage is, the amount of an optional exemption cannot be less than $5,000. 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 age 65 or older or disabled exemptions: Any taxing unit may offer an additional exemption amount of at least $3,000 for taxpayers age 65 or older and/or disabled.
To apply for a homestead exemption, fill out this form and file it at your local appraisal district office.
At Propel Tax, we want you to understand that property tax loans don’t need to be complicated. If there’s an opportunity for our clients to receive other forms of relief, we want them to know how. It’s our job and passion to help those in financial need. If you have any questions on property tax exemptions give us a call at 877.324.8445 and we’d be happy to provide you with the resources that you need to in order to have peace of mind.