Introduction
Texas homeowners can significantly reduce their property tax bill by applying for a homestead exemption. This exemption lowers the taxable value of a primary residence, resulting in lower annual property taxes.
This guide explains who qualifies, how to apply, and how much you can save with a homestead exemption in Texas.
1. What Is a Texas Homestead Exemption?
A homestead exemption reduces the taxable value of a home, helping homeowners pay less in property taxes. The exemption applies only to a homeowner’s primary residence and cannot be used for rental or investment properties.
Who Qualifies for a Texas Homestead Exemption?
To qualify, homeowners must meet the following criteria:
- The property must be your primary residence as of January 1 of the tax year.
- You must own the home (not rent).
- You must provide a valid Texas driver’s license or state ID with the home’s address.
Types of Homestead Exemptions in Texas
General Homestead Exemption
- Applies to all homeowners.
- Reduces school district taxable value by up to $100,000.
Over-65 and Disabled Person Exemption
- Additional $10,000 school district exemption for seniors and disabled individuals.
- Tax freeze on school district taxes (they will not increase).
Disabled Veteran Exemption
- 100% exemption for veterans with a service-connected disability of 100 percent.
- Partial exemptions available for veterans with disabilities between 10 to 90 percent.
Surviving Spouse Exemption
- Available to surviving spouses of military members or first responders killed in the line of duty.
- Provides 100% exemption on the home’s value.
How Much Can You Save with a Texas Homestead Exemption?
| Exemption Type | School District Exemption | Other Exemptions | Total Savings |
|---|---|---|---|
| General Homestead | $100,000 | Varies by county | $1,600 – $3,000 per year |
| Over-65 / Disabled | $110,000 | Varies by county | $2,000 – $4,500 per year |
| Disabled Veteran (100%) | 100% tax-free | – | Full exemption |
Savings depend on local property tax rates and other eligible exemptions.
How to Apply for a Texas Homestead Exemption
Step 1: Gather Required Documents
- Completed Form 50-114 (Application for Residential Homestead Exemption).
- Copy of your Texas driver’s license or state ID showing the property address.
Step 2: Submit the Application
- Submit the application to your local county appraisal district.
- Applications can be submitted by mail, online, or in person.
Step 3: Receive Your Exemption Approval
- If approved, your property tax bill will be reduced in the next tax cycle.
- Homestead exemptions do not need to be renewed annually unless circumstances change.
Texas Homestead Exemption Deadlines
| Application Type | Deadline |
|---|---|
| General Homestead Exemption | April 30 |
| Over-65 / Disabled Exemption | One year from qualifying date |
| Disabled Veteran Exemption | Any time during the year |
How to Maintain Your Texas Homestead Exemption
- Do not rent out your entire home – This may cause the exemption to be revoked.
- Keep your address updated on your Texas ID – It must match your homestead property.
- Notify the appraisal district if you move or sell the home – Exemptions do not transfer.
What Happens If You Lose Your Homestead Exemption?
If you no longer qualify, the county will:
- Remove the exemption and recalculate taxes.
- Apply rollback taxes (up to five years of back taxes plus interest).
- Issue fines or penalties for fraudulent exemption claims.
Additional Property Tax Relief Options in Texas
Homeowners who do not qualify for a homestead exemption may explore:
- Property tax deferral for seniors (over 65) – Delays tax payments until the home is sold.
- Property tax protests – Dispute your home’s appraised value to reduce taxes.
- Installment payment plans – Available for financially struggling homeowners.
10. Why Work with a CPA for Property Tax Planning?
A CPA can help:
- Ensure proper filing of homestead exemptions to maximize savings.
- Assist with property tax protests if your home is over-assessed.
- Identify additional tax deductions related to homeownership.
Conclusion
Applying for a Texas homestead exemption is a simple and effective way to reduce property tax costs. Homeowners should submit their applications before the April 30 deadline to receive maximum benefits.
For expert property tax planning, schedule a meeting with our CPA Anshul Goyal by clicking at https://calendly.com/anshulcpa/ now.
Frequently Asked Questions (FAQs)
1. Who qualifies for a homestead exemption in Texas?
Homeowners who use the property as their primary residence and have a Texas driver’s license or ID matching the home’s address.
2. How much can a homestead exemption save me?
Savings vary by county, but the general homestead exemption can reduce taxable home value by $100,000, saving homeowners $1,600 – $3,000 per year.
3. When is the deadline to apply for a homestead exemption?
Applications must be submitted by April 30 of the tax year.
4. Can I apply for a homestead exemption if I recently bought my home?
Yes, as long as you moved into the home before January 1 of the tax year.
5. What happens if I forget to apply?
You may miss out on tax savings for the current year but can apply for future years.