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Property Taxes

What is a homestead property tax exemption?

A homestead exemption removes part of the value of your property from taxation and therefore lowers the amount of your property taxes. Your home qualifies for an exemption if 1) you own it, and 2) it is your principal place of residence in January, when the county assesses annual property taxes. The amount of the exemption depends on state and county laws. Here is what you should know:

  • The application for homestead exemption is one-time only, free and there is no fee to apply. You must file your application for exemption by April 30 for an exemption to apply for that calendar year. You can apply for a retroactive exemption up to one year after the property tax delinquency date (normally February 1st). Get the application form here: https://www.comptroller.texas.gov/forms/50-114.pdf .

·   Your homestead can be a separate structure, condominium or a manufactured home located on leased land, as long as you own it. It can include up to 20 acres depending on location. For information about exemptions for manufactured homes, go to: www.tdhca.state.tx.us/mh/faqs-sol.htm

  • A married couple can claim only one residence as a homestead. If you co-own the property where you live, the exemption is based on the part that you own: for example, if you own 25%, your exemption is based on 25% of your homestead’s taxable value.
  • You can still qualify for the exemption if you move away, as long as you do not establish another primary residence and you intend to return. For example, you could keep the exemption if you enter a nursing home, go away to college, or leave for another reason.
  • If you rent part of your home or use part of it for a business, you still qualify for the exemption on the entire home, including the rented portion.
  • If your homestead is damaged or destroyed by disaster, you can qualify for the homestead exemption for up to two years from the date physical preparation for rebuilding begins. You must build on the same property and live there afterward. 

Will my homestead exemption protect me from foreclosure or collection?

NO. Two different laws apply to homesteads: The Texas Tax Code has certain exemptions that allow you to reduce annual property taxes on your homestead. The Texas Property Code protects your homestead from a forced sale to satisfy creditors such as payday lenders and debt collectors. However, your homestead is NOT protected from foreclosure for certain debts, including:

  • unpaid property taxes;
  • missed mortgage payments;
  • defaulted second liens for home equity loans or home equity lines of credit;
  • unpaid federal income taxes (IRS liens);
  • upaid past-due child support; and
  • unpaid government-backed student loans.

How much will I save with the homestead exemption or other exemptions?

It depends on the type of exemption and the amount allowed by your local taxing unit. For example, a homestead valued at $200,000 with the 20% exemption ($40,000) means you would pay property taxes as if your home were worth only $160,000. By law, every homestead is entitled to a school tax exemption of $15,000. Other exemptions include:

  • Over 65. Special exemption if you are 65 or older and live in the homestead. If you are over 65 when you die, the exemption continues for your surviving spouse if 55 or older when you die. School taxes will be frozen (won’t increase) when you turn 65, and that continues for 55-or-older surviving spouses.
  • Disability. Exemption if you have disability, which is defined by whether you qualify for Social Security Disability benefits. If you are over 65 and have a disability, you must elect which exemption to take. A disabled child in the home will not qualify for a disability homestead exemption.
  • Veterans. Exemption for veterans who are disabled, spouses and survivors of disabled veterans, and spouses and survivors of mili­tary personnel killed on active duty. The amount of the exemption depends on the percentage of service-connected disability. 100% disabled = 100% exemption.

What happens if I don’t pay my property taxes?

The taxing unit can put a lien on your homestead and foreclose on your home. After foreclosure, you have two years to buy it back. If your property taxes have been delinquent for more than 20 years, your homestead will no longer be subject to foreclosure for delinquent property taxes.