Texas is one of several states offering property-tax deductions on the taxpayer's primary residence, known as the homestead exemption. After you file and qualify for a Texas homestead exemption with the local appraisal district office, you receive exemptions for the school tax, certain county or optional exemptions, depending on the place of residence, and exemptions based on age, military status or disability.
Eligible taxpayers must reside in the homestead as of Jan. 1 of the tax year and it must be the principal residence. The dwelling must be owned by an individual or married couple, not a corporation or any type of business. Only homeowners qualify, not tenants. For those over 65 or disabled, the residency and ownership date of Jan. 1 is waived specifically for the over 65 or disabled portion of the homestead exemption.
Determining the total tax on an individual property depends on three factors. The first is the property's appraised value as determined by the local appraisal district. The second is the number of exemptions for which the property owners qualify, and the third is the tax rate set by the local taxing jurisdiction. Once your property qualifies for the homestead exemption, the appraised value is likely lower than fair-market value due to the legal “homestead cap.” With the homestead cap, the property's value may only increase a maximum of 10 percent annually. Residential properties receive the homestead cap the year following the owner's homestead -exemption qualification.
At the time of publication, all homestead owners receive a $15,000 exemption from the dwelling's value for school-tax purposes. Some counties collect special taxes for flood control or farm-to-market roads, and homestead owners in these counties receive a $3,000 exemption. Those age 65 or older or with disabilities receive an additional $10,000 school- tax exemption but cannot receive two exemptions for disability and age. Taxing units, including schools, counties, municipalities or special tax districts may offer exemptions of up to 20 percent of the homestead's value, with no optional exemption worth less than $5,000. Such taxing units may, at their discretion, offer additional exemption amounts of a minimum of $3,000 to those age 65 or older or who are disabled. The surviving spouses of 100- percent disabled military veterans continue to receive the spouse's exemption.
Qualified Texas homesteads run the gamut of residential-dwelling units, from spreads of up to 20 acres to mobile homes and condominiums. Mobile homeowners must include the make and identification number of the unit on the application. It doesn't matter if the land is owned or leased by the taxpayer, as long as he owns the dwelling unit.
- Harris County Appraisal District: Understanding the Property Tax Process
- State of Texas: Application for Residence Homestead Exemption
- Texas Comptroller of Public Accounts: Exemptions
- Congressional Research Service. "Homestead Exemptions in Bankruptcy After the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)," Summary Page. Accessed April 17, 2020.
- Institute on Taxation and Economic Policy. "Property Tax Homestead Exemptions." Accessed April 17, 2020.
- Connecticut General Assembly, OLR Research Report. "State Homestead Exemption and Credit Programs." Accessed April 17, 2020.
- Congressional Research Service. "Homestead Exemptions in Bankruptcy After the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)," Pages 4-46. Accessed April 17, 2020.
- Congressional Research Service. "Homestead Exemptions in Bankruptcy After the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)," Pages 9 and 41. Accessed April 17, 2020.
- U.S. House of Representatives, Office of the Law Revision Counsel. "11 USC 522: Exemptions." Accessed Feb. 2, 2020.
- Federal Register. "Revision of Certain Dollar Amounts in the Bankruptcy Code Prescribed Under Section 104(a) of the Code." Accessed Feb. 2, 2020.
- Congressional Research Service. "Homestead Exemptions in Bankruptcy After the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)," Pages 31 and 36. Accessed April 17, 2020.
A graduate of New York University, Jane Meggitt's work has appeared in dozens of publications, including Sapling, Zack's, Financial Advisor, nj.com, LegalZoom and The Nest.