Monday, January 10, 2011

What is Homestead Exemption?

Real Estate 411 - What is "Homestead Exemption"?

As you are clearing the clutter and getting your finances and tax information in order. One very important "to do" NOT to forget is the Texas Homestead Exemption. If you have not previously filed your homestead exemption, now is the time!

Although you have probably heard the term "homestead exemption" you may be a bit confused about what it is and how to take advantage of it. Here is some information that is sure to help:

Important note: Do not confuse the Texas Homestead Law with the Homestead Tax Law. The Homestead Law is created by the Texas Constitution, and no filing is required for it. It cannot be waived by contract or even a change in the state law. Every property owner and leasee has homestead protection (with certain restrictions, of course). For information on the Texas Homestead Law visit

The Texas Homestead Tax Law - or "homestead exemption", allows a homeowner to apply for homestead tax exemptions on your principal residence. Homestead exemptions remove part of your home's value from taxation, so they lower your taxes. For example, your home is appraised at $100,000, and you qualify for a $15,000 exemption (this is the amount mandated for school districts), you will pay school taxes on the home as if it was worth only $85,000.

To qualify for the homestead TAX exemption, the homeowner must own and live in the property as a principle residence on January 1st of the tax year. And, the homeowner must submit a homestead exemption application to the appropriate appraisal district between January 1 and April 30. The law now says that if this was overlooked, the homeowner can file in any year of ownership, and the exemption will revert back one year.

You may be wondering "do all homes qualify for homestead exemptions?" No, only a homeowner's principal residence qualifies. To qualify, a home must meet the definition of a residence homestead: A separate structure, condominium or a manufactured home located on owned or leased land. The home's owner must be an individual (for example: not a corporation or other business entity) and use the home as his or her principal residence on January 1 of the tax year. (If you are age 65 or older, the January 1 ownership and residency are not required for the age 65 homestead exemption.)

There are several types of exemptions you may receive (for the details be sure to check out the offical site here):

* School taxes (this is the "general homestead exemption"): All residence homestead owners may receive a $15,000 homestead exemption from their home's value for school taxes.
* County taxes
* Age 65 or older and disabled exemptions
* Optional percentage exemptions
* Optional 65 or older or disabled exemptions

Filing your Homestead Exemption

You can file an Application for Residential Homestead Exemption with your appraisal district for the $15,000 homestead exemption up to one year after the taxes on the homestead are due. Click here for the form. Once you receive the exemption, you do not need to reapply unless the chief appraiser sends you a new application.

Filing Deadline

You can file any homestead exemption up to one year after the delinquency date. The delinquency date is normally February 1st. If you are 65 or older or disabled, you qualify for the exemption on the date you become 65 or become disabled. To receive the exemption for that year, 65 or older or disabled homeowners must apply for the exemption no later than one year from the date you qualify or one year after the delinquency date, whichever is later. If you miss the deadline you may apply for the following year.

If you need help or clarification on how to file, or if you quailify for a homestead exemption, consult with your CENTURY 21 Judge Fite REALTOR.

CENTURY 21 Judge Fite Company

800-451-8055 or email

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