How to Qualify for a Homestead Exemption in Texas

Owning a home comes with a lot of responsibilities, and one of the biggest is paying property taxes. But did you know that you could be saving hundreds, maybe even thousands of dollars on your property taxes with something called a homestead exemption? This valuable exemption is one of the most popular ways for Texas homeowners to cut down on their yearly tax bills. In this guide, we’re breaking down everything you need to know about qualifying for a homestead exemption in Texas and how to apply for it.

What is a Homestead Exemption?

A homestead exemption is a legal provision that reduces the taxable value of your primary residence, effectively lowering the amount you owe in property taxes. It's a great financial relief for homeowners, especially in Texas where property taxes can be quite high.

How Does It Work?

By applying for the homestead exemption, you reduce the appraised value of your home, which in turn lowers your property tax bill. For example, if your home is valued at $250,000, and you qualify for a $25,000 homestead exemption, the taxable value of your home would be reduced to $225,000.

What Property Qualifies as a "Homestead"?

In Texas, only your primary residence can qualify for a homestead exemption. The home must be your principal place of residence, and you must have lived there on January 1st of the year you are applying for the exemption. This can include:

• Single-family homes
• Condominiums
• Manufactured homes

The key is that it must be your primary home. You can't claim a homestead exemption on a second home, rental property, or vacation property. Your Texas homestead is where you live most of the time, where you’re registered to vote, and where your car is registered.

Who is Eligible for a Homestead Exemption?

To be eligible for a homestead exemption in Texas, you must meet a few key criteria:

1. Primary Residence: The property must be your primary home, and you must have lived there as of January 1st of the tax year.
2. Ownership: You must own the property, either solely or jointly, and it cannot be a rental or investment property.
3. Residency: You must prove your residency with valid documentation such as a Texas driver's license or state-issued ID. The address on your ID must match the address of the property for which you are claiming the exemption.

Additional exemptions are available for people 65 or older, those with a disability, and disabled veterans.

How Much Will I Save with the Homestead Exemption?

The homestead exemption offers significant savings, depending on the taxable value of your home and the local tax rates. Here’s a breakdown:

• School District Taxes: The basic exemption reduces your home's value by $25,000 for school district taxes.
• County Taxes: If your county collects special taxes for flood control or farm-to-market roads, you could qualify for a $3,000 exemption.
• Optional Exemptions: Some cities, counties, and special districts offer additional homestead exemptions, which can range from 1% to 20% of your home’s value.

For example, if your home is valued at $300,000 and you qualify for a $25,000 exemption on school district taxes, you would only be taxed on $275,000, resulting in hundreds of dollars in savings per year.

How Do I Apply for a Homestead Exemption?

Applying for a homestead exemption in Texas is a fairly simple process:

1. Start by visiting your county appraisal district's website and download the Residence Homestead Exemption Application.
2. Provide Proof of Residency: You'll need to submit proof of ownership and residency. This usually includes a copy of your Texas driver's license or ID card, which must have the same address as the property for which you’re applying.
3. Submit by the Deadline: The application must be submitted by April 30th of the year you are seeking the exemption.

Make sure to apply as soon as possible to start benefiting from these tax savings!

Property Tax in Texas: Top 10 Property Tax by County 

1. Property Tax in Harris County 
2. Property Tax in Dallas County  
3. Property Tax in Tarrant County (Fort Worth)
4. Property Tax in Bexar County (San Antonio)
5. Property Tax in Travis County (Austin)
6. Property Tax in Collin County (Plano)
7. Property Tax in Denton County (part of the DFW metroplex)
8. Property Tax in El Paso County (El Paso)
9. Property Tax in Fort Bend County (suburb of Houston)
10. Property Tax in Montgomery County (north of Houston)

How Often Do I Need to Apply for a Homestead Exemption?

Good news—once you qualify for the homestead exemption, you don’t have to reapply every year. The exemption remains in place as long as you continue to meet the eligibility requirements (e.g., you still own the home and it remains your primary residence). However, if you move or sell your home, you’ll need to reapply for the exemption on your new property.

Can I Ask for a Payment Plan to Pay My Property Taxes?

Yes! Texas allows homeowners to set up installment payment plans if they're unable to pay their property taxes in full by the deadline. This is especially helpful if you’re facing a large tax bill and need some flexibility. Most counties allow you to divide your payment into four installments over the year.

What if I Miss the Deadline for Filing for a Homestead Exemption?

If you miss the April 30th deadline, don’t panic. You can still apply for the homestead exemption retroactively for up to two years. This means that if you’re filing late, you can still claim exemptions for the two previous tax years and potentially get a refund on any overpaid taxes.

Can You Reduce Your Property Tax with a Homestead Exemption?

Absolutely! The homestead exemption is one of the most effective ways to lower your property tax bill in Texas. By reducing the taxable value of your home, you’re cutting down the amount of taxes you owe each year. Depending on the specific exemptions you qualify for, you could see significant savings on your tax bill.

🏠 How to Reduce Property Tax? Learn All About Texas Property Tax Relief

Consider Working with Abode

Navigating the ins and outs of Texas property tax laws can be confusing, and that’s where Abode comes in. We specialize in helping Texas homeowners maximize their property tax savings through exemptions, appeals, and expert guidance. Whether you're looking to apply for a homestead exemption or appeal a property tax assessment, our team at Abode is here to help you every step of the way.