2022 Texas Homestead Tax Exemption
WHAT IS IT? You’ve probably heard of homestead exemptions but may have questions about what it is. Chances our that is why you are here. In this article, we will talk about what it is, the requirements, and the application process.
In the most basic sense, a homestead exemption is a tax break for qualifying homeowners. It allows you to lower the taxable value so you are not taxed as much. The taxes that are paid are a major revenue source for the state of Texas. They help fund public schools, libraries, streets and roads, and more.
HOW DOES IT WORK?
In Texas, your primary home is eligible for an exemption of taxes up to $40,000. Section 11.13(b) of the state’s tax code requires public school districts to offer a $40,000 exemption on “residence homesteads” located within their districts. In non-legal terms, that means the address in which you are applying for is your primary residence.
Other sections of the tax code offer similar exemptions:
Section 11.13(n) gives taxing units the option to offer a separate homestead exemption of up to 20% of the appraised property value — but not less than $5,000.
Section 11.13(a) requires a homestead exemption of $3,000 to be offered in those counties that collect flood-control or “farm-to-market” taxes.
The most common type of homestead exemption in Texas is the $40,000 reduction mentioned above, as outlined in section 11.13(b) of the state tax code.
How does it play out in real life?
If you home is worth $500,000, under the standard Texas homestead exemption, your taxable value would be redused by $25,000. So you would be paying taxes on a $475,000 vs $500,000. That could potentially save you hundreds of dollars annually.
What about the $40,000? This depends on where you live, you might have a separate exemption of up to $40,000. Check out the 'appraisal district' on your local county tax website. You will find more information about the rules and guidelines, as well as any special requirements.
WHO QUALIFIES?
The good news is the qualifications for the $40,000 hometstead exemption criteria are not very strict. The basisc are:
- You must have an ownership interest in the property
- Use it as your “principal residence”
In other words, you can’t use a homestead exemption on a second / vacation home. But that’s about it, as far as requirements go.
The Texas Comptroller’s website states:
“A homestead can be a separate structure, condominium or a manufactured home located on owned or leased land, as long as the individual living in the home owns it. A homestead can include up to 20 acres, if the land is owned by the homeowner and used for a purpose related to the residential use of the homestead.”
Note: The general rules and procedures for a Texas homestead exemption come from state taxation officials. But the individual counties can implement them in different ways. So the exact requirements and exemption amounts can vary slightly from one county to the next.
For general homestead exemption information, click here.
HOW TO APPLY!
The paperwork is simple - all you have to do is file a bit of paperwork!
Every county is different so be sure to check out those details here. In general, it works like this:
Visit the tax appraisal website for your county to find any specific instructions.
Obtain a copy of the “Application of Residential Homestead Exemption” (a.k.a., Property Tax Form 50-114) from your local appraisal district.
Complete the application with the required information about yourself and the property you’re claiming as a primary residence.
Submit the form in accordance with instructions provided by your appraisal district.
Provide any additional items your district might require (e.g., copy of driver’s license).
Follow up with your local appraisal district if you don’t receive any confirmation.
We're here to help! If you have any questions, reach out to info@houxhomesre.com.
