Step-by-Step Guide: How to Handle Your Homestead Exemption Audit Letter

Here’s what you need to know about the homestead exemption audit letter:

• Texas law requires homestead exemptions to be audited every five years; you may receive an audit letter at any time.
• The letter asks for proof that you still qualify for the exemption, such as your driver’s license or other form of valid ID.
• Respond by the deadline, usually by mail (certified) or online, submitting all requested documents.
• Failure to respond on time risks losing your exemption and facing higher property taxes.
• After review, if your exemption is denied, you have the right to appeal to the appraisal review board.
• Gill, Denson & Company can help you understand the letter, gather the necessary documents, respond appropriately, and appeal if needed.

What Is a Homestead Exemption Audit?

If you own a home in Texas and claim a homestead exemption, your local appraisal district may send you an audit letter. This letter requests proof that you still qualify for the exemption, which reduces your property taxes by lowering the taxable value of your home.

The audit is part of the appraisal district’s effort to ensure exemptions are granted only to eligible homeowners, as mandated by Texas Property Tax Code 11.43 (h-1). Recent legislation now requires Texas homesteads to be audited once every five years. Because this process could take years to complete, you may receive a homestead exemption audit letter in any given year. If you receive one, it’s important to take this letter seriously and respond carefully.

What to Do If You Receive a Homestead Exemption Audit Letter

When you receive the homestead exemption audit letter, you must follow these steps:

• Gather Documentation: Collect proof of your primary residence, such as your Texas driver’s license, voter registration, utility bills, or vehicle registration showing your home address.
• Check Deadlines: The letter will specify a deadline for your response. It is crucial that you do not miss this deadline.
• Respond Thoroughly: Submit all requested documents and any additional information that supports your claim. Smaller counties typically prefer you mail the provided form (be sure to use certified mail). Larger counties may allow you to submit on your local appraisal district website.
• Keep Copies: Always keep copies of what you send for your records.

If you fail to verify your eligibility by the deadline, you risk losing your exemption status and receiving a higher property tax bill as a result.

What Happens Next?

The CAD may take up to 90 days to process your verification documents after receiving your response. You will be notified if they determine you’re no longer eligible for your exemptions. If your exemption is denied, you have the right to appeal the decision with the appraisal review board. There should be instructions on how to do so in the rejection notification.

How Gill, Denson & Company Can Help

Navigating a homestead exemption audit can be confusing and stressful. Gill, Denson & Company specializes in Texas property tax matters, including exemption audits and protests.

 If you’re unsure which documents are required or how to respond, we can assist you with:

• A personalized review of your audit letter and situation
• Guidance on gathering the right documentation
• Responding to the county appraisal district
• Certify mail your documents or submit them electronically
• Support through the protest process, if necessary

Reaching out early can help you maintain your exemption and avoid unnecessary tax increases. Don’t wait until the deadline. We recommend contacting us as soon as you receive your homestead exemption audit letter. If you are already a client of ours and your homestead requires verification, your CAD will also notify us.

Receiving a homestead exemption audit letter is a serious matter that requires prompt and careful action. Consulting with experts like Gill, Denson & Company can prevent costly mistakes during the audit and protest process. Reach out to us today to protect your valuable exemption and keep your property taxes in check.