What is the Homestead Tax Exemption?

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Posted by Sam Branson on August 18, 2023

The Texas Homestead Tax Exemption is a significant policy that offers financial relief to homeowners across the Lone Star state. This exemption, rooted in the Texas Constitution, provides a unique system that’s designed to alleviate the property tax burden on Texas residents.

With the cost of homeownership often being a significant expense, understanding the Texas Homestead Tax Exemption and how it benefits residents can be instrumental in financial planning and home budgeting. This article aims to demystify the principles behind this exemption, helping Texas homeowners make the most out of their property investments.

Eligibility for the Homestead Exemption

The primary requirement is that the property owner must consider and use the property as their principal residence. The property owner must own, occupy, and claim the dwelling as their principal residence on January 1 of the tax year. This exemption cannot be applied to investment properties or second homes.

Benefits of the Homestead Exemption

The primary benefit of the Texas Homestead Tax Exemption is to reduce homeowners’ property tax burden. Upon approval of your homestead exemption, the appraised value of your home is reduced, leading to lower property taxes. Notably, the Texas Homestead Tax Exemption offers at least $25,000 off the appraised value of your home for school district taxes.

Additionally, the Texas Homestead Exemption introduces a tax ceiling for school district taxes. This means that the school taxes on your homestead will not increase as long as you make no significant improvements to it.

Applying for the Homestead Exemption

To apply for the Homestead Exemption in Texas, homeowners need to complete the Application for Residential Homestead Exemption. This form can be found and submitted online, or it can be mailed to the county appraisal district. The deadline for filing the application is between January 1 and April 30.

Important Notes

Please note that if you move out of your home, the exemption will be removed, and you’ll have to apply again if you return. The exemption extends to a surviving spouse as long as they are 55 years or older and haven’t remarried.

While the Homestead Exemption in Texas offers a significant financial advantage to homeowners, it’s essential to consult with a tax or realty professional to fully understand the impact on your specific situation.

FAQ Resource

Application Instructions

The Texas Homestead Tax Exemption is an instrumental tool in the financial planning toolkit of Texas homeowners. It offers substantial relief in the form of lower property taxes, making homeownership in the Lone Star state more affordable. Understanding and taking advantage of this exemption can lead to significant savings and more accurate budgeting for home expenses. It’s in the best interest of every eligible Texas homeowner to apply for this exemption and reap its benefits.

Contact The Seely Group today to learn more about the homestead exemption.


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