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- What Are Netting Escrows & How Does It Work?: The Best Guide - January 2, 2024
- The Secret About Prescriptive Easement: Top Guide 1 Must Know - December 4, 2023
- About Home Equity Loans In Texas And How Can One Obtain It - November 27, 2023
About Homestead Exemption
After you purchase a real estate property, you are liable to pay property taxes on that property every year to your county.
However, if it is your primary residence, you might be able to get a tax exemption and save money on your property taxes. In this post, we will understand what is homestead exemption and how it works.
What Is A Homestead Exemption?
This exemption helps the homeowner to save money on their property taxes by removing a portion of the assessed value of the primary property for your taxes so that you don’t have to pay the taxes according to the market value.
For example, if the market value of your property is $250,000 and the county assessed value is $180,000, you are liable to pay the property tax on $180,000 and not the $250,000.
Most of the time the county assessed value is going to be lower than the current market value of the property.
In the state of Texas, a homeowner can get a homestead exemption for up to $25,000 of the assessed property value which has to be your primary residence. This tax exemption is only for your primary residence.
You cannot file for the exemption on your rental home or secondary home.
How Is Property Tax Determined By The County?
The property tax is calculated on the assessed value of the property. The county will multiply the assessed value of the property by the county’s tax rate in the area where your property is located.
The tax rate may vary based on the location of the property, county, and school district. You can get the tax rate of your property on the county appraisal district website for your county.
For example, if your property value is $250,000 and the current tax rate in your area is 1.5% your annual property tax for the current year will be $3,750.
How Frequently Do I Have To File For Homestead Exemption?
The best part about filing for homestead tax exemption is that you don’t have to file it every year.
You do not have to file the exemption unless you receive a new application request from the chief appraiser from your county.
Once you buy a new property from the buyer, you need to contact your county or file for your exemption online through the county website.
What Are The Rules For Filing For Homestead Exemption?
If you are moving into your new home before January you would be unable to file for exemption for that year, you would have to wait until the 1st of January and that is when you would be able to file for your exemption.
The last day to file your exemptions in the state of Texas is the 30th of April every year.
Ensure that you mark the date on your calendar and file your exemption before that date. Remember, you only have to file this once, hence ensure you do it before the deadline.
Conclusion
The best thing about filing for exemption is that you don’t have to pay anything if you file for it online.
There is a variety of homes accepted for filing exemption like manufactured homes, single-family homes, townhouses, etc.
If you own a home on up to twenty acres of land you are eligible to file for the exemption.
It is one of the great ways to save on your property taxes every year. All you need to do is put in a few hours to update your driver’s license and file for the homestead exemption online.
