Good news for residential homebuyers in Texas! The Texas legislature passed a law, effective January 1, 2022, allowing homebuyers to file for (and be granted) the Homestead Exemption as soon as they close on a new home and change their driver’s license reflecting the new address. The home must be complete and livable by this date. Prior to this update, homeowners had to wait until the next year to file for an exemption. Granted by the county appraisal district, homestead exemptions protect a percentage of the home’s value from taxation, which helps lower taxes. If you’re planning to purchase a home (or have recently purchased a home) in Texas for residential living, you don’t want to miss out on this valuable exemption. Here’s a few things to know:
Homestead is a general exemption intended for Texas homeowners whose property is considered their primary residence. It can be a house, condominium, or manufactured home on owned or leased land as long as you live in the structure and own it. A homestead exemption can also include up to 20 acres of land if the land is owned by the homeowner and used for residential purposes, such as a yard. An applicant is required to state that he/she does not claim an exemption on another residence homestead in or outside of Texas.
There’s an additional homestead exemption for you if you’re 65 or older. School districts automatically grant a $10,000 exemption for qualified persons of 65 or older. An additional advantage is the school tax ceiling. Once you qualify, your taxes will not increase unless you make improvements to your home. Most cities, counties and other taxing units offer 65 plus homestead exemptions of at least $3,000 or more even though they are not required to do so.
Disabled vets may also qualify for an addition to the homestead exemption. You can qualify for this additional exemption if you are a U.S. veteran with a disability rating of 100% or you are declared unemployable by the Veterans Administration and receive disability benefits from them. Your disability must be service connected. If you qualify, 100% of the value of the homestead you reside at will be exempted. Even if you are not 100% disabled, you can still qualify for an exemption but it will be less. Exemptions may also be available for the surviving spouse of a disabled veteran.
How To File
To file for the Homestead Exemption, you will need to submit an application and the required documents with the county appraisal district where the property is located. You will need a Texas drivers license or state issued ID that matches the address of the new residential property. Once you’ve received the exemption, you don’t need to reapply unless the appraiser sends you a new application stating that you have to file again. The deadline is May 1st. For more information and specific tax codes go to the Texas Comptroller Website and click on Residence Homestead.
For assistance with the homestead exemption, contact the tax advisors at Gill, Denson & Company.