Property Tax Help for Low-Income Homeowners in Texas

In Texas, counties, school districts and other local jurisdictions rather than the state assess taxes based on a property's value. Although the state's local property tax rates are above average, residents benefit from the lack of a state income tax to reduce their tax burden.

No Texas state provision gives property tax exemptions ‌solely based on income‌. However, the Texas Department of Housing and Community Affairs administers the federally funded Homeowner Assistance Fund for low- and moderate-income taxpayers who can't pay property taxes due to the COVID-19 pandemic. Eligibility for property tax assistance from the fund requires homeowning taxpayers to:

• Have an income level falling within the household income limits of up to 150 percent of the area median or 100 percent of the U.S. median income, whichever is greater
• Own and occupy a Texas home as a primary residence
• Have experienced a financial hardship (lost income or increased expenses) after January 21, 2020 due to COVID-19.
• Be behind on their property tax, mortgage loan, property insurance, association fees or utility bills. The home need not be in foreclosure.

According to the U.S. Department of Housing and Urban Development, a property owner with a family of four in 2021 can qualify with an annual income of up to $79,900. The limit rises to $80,050 or $86,000 for families of five and six, respectively.

The assistance program can pay for up to three months of your past-due property tax bill or other eligible expenses and up to three months of future utility payments. The program offers homeowners with qualified hardships a maximum of $65,000 per household, of which $25,000 can be used for unpaid property-related charges, including taxes.

Eligible homeowners can apply at the program's online portal. Required documentation includes an ID card, billing statements, proof of occupancy (utility bills, mortgage statements) and income documentation (pay stubs, tax returns).

Texas' local governments (or taxing units) offer various total or partial property tax exemptions. The most important one is the residence homestead exemption, which reduces some or all of a property's appraised value to determine its property tax payments. The state requires the taxing units to provide specific mandatory property tax relief based on this exemption, but these localities have the option to offer additional assistance.

Under the residence homestead exemption, all eligible homeowners living in school districts receive a $40,000 exemption on their principal residence values. The local taxing units may offer an additional 20 percent exemption of the total value. To qualify, you must submit the Application for Residential Homestead Exemption and supporting documentation to your local appraisal district. The deadline is April 30 of the tax year. However, you can apply for up to two years afterward.

In addition, the residence homestead exemption provides homeowners who are disabled individuals or senior citizens (age 65+) up to a $10,000 exemption for school taxes (not property taxes). You can apply to your local appraisal district, but if you already applied for the $40,000 exemption, the district will automatically sign you up when you reach 65. You can qualify for either the senior or disability exemption but not both.

While not explicitly designed for those with low income, the following exemptions assist selected homeowners, including many with low income:

• A temporary exemption is available for qualified property that is physically damaged (at least 15 percent damaged) in a governor-declared disaster area. You have 105 days after the disaster declaration to file for this exemption. The exemption expires on January 1 of the year the home is first reappraised.
• Disabled veterans can receive up to a $12,000 property tax exemption depending on their disability ratings from the U.S. Veterans Administration. Surviving spouses receive a total property tax exemption while not remarried.
• Surviving spouses of first responders receive a total property tax exemption if their spouse dies in the line of duty.

As with the homestead exemption, these programs require you to submit an application and supporting documents to your local appraisal district.

In Texas, property tax exemptions are also available for private schools, public property and religious and charitable organizations.