Don’t Leave Money on the Table when it Comes to your Texas Property Taxes

Many people in my generation (including myself) never thought they would ever own a home- that was something our parents did.  Yet, here I find myself today as a young(ish) homeowner in East Texas, building equity.  Where did all the time go?  Because Texas has no individual income tax, a large portion of local tax revenue is driven by real property taxes.  To counteract this, the State of Texas offers all homeowners (not just our parents) an easy way to reduce their tax burden via the Texas Homestead Exemption.  We’ll briefly examine this vital tax-savings measure and how to ensure you don’t miss out. 

Homestead Exemption

Texas counties generally offer a $25,000 exemption from School district taxes.  This is a dollar-for-dollar reduction in the taxable property value of a residence.  This is by far the most common property tax exemption available to Texas taxpayers. The only requirement for this exemption is that the owner must use the property as their principal residence.  An application must be filed with the county’s appraisal district between Jan.1 and April 30 of the year for which the exemption is requested.  Most title companies include an exemption application with your closing documents when you purchase your home.  Be sure not to lose this important document in the shuffle of moving; you could miss out on substantial tax savings!

Some clients can also lose out on this exemption for the year after they move back to Texas after living out-of-state.  For example, if they rented out their home during this time and did not re-apply for the homestead exemption in a timely enough manner upon returning.  It’s always a good idea to periodically review your exemption status with your appraisal district, especially if you have ever rented out your principal home.

Person Age 65 or Older (or Surviving Spouse)

This is an extension of the general homestead exemption.  Homeowners age 65 or older qualify for an additional 10,000 in school district tax exemptions (among others).  This also applies to the surviving spouse of a decedent who was over age 65.  In addition, this exemption caps the amount of school district taxes due in the year the taxpayer qualifies - this amount can’t increase moving forward.  Most homeowners will automatically qualify with the appraisal district for this exemption upon turning 65. However, it’s always a good idea to verify this status in the year you qualify. 

Saving money and knowing our rights is not just for our parents’ generation!  Every Texas homeowner should take advantage of these exemptions. Know your rights and don’t miss out on these important exemptions, which could save you hundreds every year!

For more information on Texas property tax exemptions, refer to the link below and/or visit your local appraisal district website:

https://comptroller.texas.gov/taxes/property-tax/exemptions/

If you have any questions contact Clint Cooper at clint@gmpcpa.com

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