Am I Eligible for a Texas Homeowner’s Property Tax Exemption?

Applying for homeowner’s exemptions is an excellent way for Texans to lower their annual property tax bills. Though there are no state property taxes in Texas, each locality uses property taxes to fund a significant portion of services, such as schools, police and fire departments, roads, and other services.

This means that local property taxes are often high and a distinct burden on individual homeowners. Fortunately, qualifying for an exemption lets you pay less every year.

How Do Property Tax Exemptions Work?

Your property tax bill is calculated based on your home’s assessed value and local tax rates. For example, if the local appraisal district assesses your home at $100,000 and the local school district has a tax rate of 1%, you will pay $1,000 in yearly taxes for schools.

A property tax exemption reduces the assessed value of your home before the local tax rates are applied. For instance, in the example above, if you received a $25,000 property tax exemption, your assessed home value would still be $100,000. But the amount used to calculate your tax bills would be $75,000 ($100,000 minus the $25,000 exemption).

Therefore, with the exemption, you would pay 1% on $75,000, or $750. This hypothetical exemption cuts your tax bill by $250 every year.

What Is a Residential Homestead Exemption?

For Texans, the most well-known property tax exemption is for residential homesteads. Under this exemption, you can reduce your property tax bills on your principal residence.

To qualify as your “principal residence,” you must live in the property for more than half of the year. State law requires school districts to offer a general residential homestead exemption of $25,000 to all Texas homeowners. As shown above, this exemption can cut hundreds from your yearly tax bills. 

Additionally, local taxing units such as cities, counties, school districts, and special districts can choose to offer a homestead exemption of up to 20% of your home’s value. If a taxing unit decides to offer a homestead exemption, the minimum you can receive is $5,000. These local tax unit exemptions can lead to significant tax savings for many homeowners.

However, you must apply for and receive approval for a residential homestead exemption. Texas does not automatically apply the exemption for every homeowner. Instead, you must file an application for a homestead exemption with your local appraisal district and receive approval.  Once you are approved, you do not need to reapply unless the appraisal district sends you a new application.

What Types of Homestead Exemptions Can I Get?

In addition to the residential homestead exemption, Texas has various other exemptions from property taxes. For instance, if you are over 65 years old or disabled, you may qualify for additional tax relief. Likewise, if you are a disabled veteran or the surviving spouse of a disabled veteran or first responder killed in the line of duty, there are specific property tax exemptions designed for you.

When Should I File a Property Tax Protest?

Sometimes, homeowners are wrongly denied exemptions that they are entitled to receive. If your local appraisal district incorrectly refuses your homestead exemption application, you can file a property tax protest to appeal this decision.

However, even if you have secured all the Texas homestead exemptions you qualify for, you can still further reduce your property tax bills. Filing a property tax protest with your local appraisal district can result in a lower assessed value for your home. If successful, the exemptions would then be applied to a reduced assessed value, increasing your savings.

To succeed in a property tax protest, you’ll need to present evidence of an incorrect assessment at a formal hearing. Having experienced representation throughout the protest process can help you secure a lower property tax bill. The skilled tax protest team at Watchtower Protest is ready to help you get your property taxes reduced, and you won’t pay a cent until we succeed. Sign up for our risk-free services today!