Types of Exemptions Available to Homeowners

Texas homeowners can save thousands of dollars on their property taxes by taking advantage of the many homestead exemptions available in the state. An exemption removes part of the value of your property from taxation and lowers your taxes. For example, if your home is valued at $100,000 and you qualify for a $20,000 exemption, you pay taxes on your home as if it was worth just $80,000. Whether you’re a first time homeowner in Texas, or maybe you haven’t paid much attention to exemption opportunities in the past, you’ll want to pay attention now. Learning about home tax exemptions and applying them correctly is well worth the extra effort. Without getting too complicated, here’s a few of the exemptions offered in Texas that you, as a homeowner,  may qualify for:

Homestead 

-Homestead is a general exemption intended for Texas homeowners whose property is considered their primary residence. An applicant is required to state that he/she does not claim an exemption on another residence homestead in or outside of Texas.  

-Homestead requires school districts to offer a $25,000 exemption on residence homesteads. Plus, it allows any taxing unit the option to decide locally to offer a separate residence homestead exemption of up 20% of a property’s appraised value. This local option exemption can’t be less than $5,000. 

-Also, Texas counties that collect farm-to-market or flood control taxes are required to offer a $3,000 residence homestead exemption. 

For more information and specific tax codes go to: https://comptroller.texas.gov/taxes/property-tax/exemptions/ and click on Residence Homestead.

–Homestead Cap is an extra benefit of the general Homestead exemption. The “Cap” limits increases in appraised values for homestead properties. This is one of the most valuable exemptions out there and is especially important in today’s world of rapidly rising home values. Homestead Cap applies to your homestead starting the second year that you have a homestead exemption. If you qualify, your taxes calculated on the appraised value cannot exceed the lesser of: the year’s market value or last year’s appraised value (plus 10%, plus the value of any improvements made the preceding year).

65 Plus

If you are a homeowner aged 65 or older, you are likely eligible for more exemptions. School districts automatically grant an additional $10,000 exemptions for qualified persons 65 or older. An additional advantage is the school tax ceiling. Once you qualify, your school taxes will not increase unless you make improvements to your home. Most cities, counties and other taxing units offer over-65 homestead exemptions of at least $3,000 or more, even though they are not required to do so. 

Disabled Veterans

You can qualify for this exemption on your homestead 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. For more information, reach out to the tax professionals at gdcotax.com. Spread the word to other disabled veterans in Texas so they don’t miss out on this valuable exemption. 

Homeowners With Disability

A disabled person, one who can’t work because of a physical or mental disability or one who is 55 or older and blind, may receive a $10,000 exemption for school taxes. This is in addition to all of the exemptions available to  property owners with the homestead exemption. Plus, any tax unit can offer an exemption of at least $3,000 from the home value of disabled homeowners. Disabled homeowners also qualify for the school tax ceiling exemption, the same as those who are 65 or older. If you qualify for this, 100 percent of the homestead you reside at will be exempted  from property taxes

Inherited Homes

Homeowners who inherited their home may qualify for a homestead exemption that can save you thousands of dollars. A Texas law that went into effect in 2019 makes it easier for heir property owners to qualify for this homestead exemption. Property owners who are receiving a partial homestead exemption on inherited property can now apply for a 100 percent homestead exemption even if the home has co-owners. 

Don’t miss out on home tax exemptions that you are qualified for. Contact Gill, Denson & Company to hire the Texas property tax reduction specialists.