Every year in January I reach out to my clients who have purchased last year to remind them that it’s now time to file their homestead exemption.
First of all what is a homestead exemption? A homestead exemption is a reduction of your home’s value from taxation. For example, if your home is appraised at $100,000 and you qualify for a $25,000 exemption, which is the amount mandated for school districts, you will only pay school taxes on the home as if it was worth only $75,000.
From the definition provided by the state comptroller a Homestead can be a separate structure, condominium or a manufactured home located on owned or leased land, as long as the individual living in the home owns it. A Homestead can include up to 20 acres, if the land is owned by the homeowner and used for a purpose related to the residential use of the Homestead.
Not all homes qualify for homestead exemption. The home must be the homeowner’s principal residence to qualify, and the homeowner must have occupied the residence on January 1 of the tax year.
So if you purchased your home in 2020 now is the time to file your homestead exemption so that you get that benefit for the 2021 tax year
How much can you get for your homestead exemption? Well depending on where you live different taxing entities offer different tax breaks. At a minimum in the state of Texas the homestead exemption grant you a $25,000 reduction on your property value for school taxes. Other taxing districts may offer additional tax breaks but those are on a case by case basis.
In order to get this $25,000 Homestead exemption on your school taxes all you have to do is file an application for a residential home said exemption. You can find this form on the comptrollers website or a lot of local county tax districts allow you to file this online. To find out if your local tax district allows you to do this online just go to google and search your county and then the words appraisal district and it should show up in one of the top search results. So if you’re in Dallas County you were google Dallas County appraisal District.
While you’re on that website of your local tax district see what they have for homestead exemptions and see what they say the process is and if you can send the form to them. When all else fails you can always call your local tax authority and they will give you the instructions on what to do.
Now, the reason I remind my clients in January about filing your homestead exemption is because there is a deadline of April 30th to file your homestead exemption if you want to receive the exemption that tax year.
Now here’s a biggie about Homestead exemptions: They are free to file!
Unfortunately, scammers get ahold of the sales information on your house and send letters out at the beginning of the year telling you to pay them a fee to file the homestead exemption for you. They charge a fee like $50 to do this and it’s totally unnecessary. They send a letter in the mail that looks really official and does not inform you that this is something that’s done for free with the local tax district.
So, save yourself some money in the short and long-term and file your homestead exemption if you qualify and haven’t already.
I hope you got a little something out of this addition of Jennifer the realtor explains Homestead exemption. Be sure to subscribe to this channel to get more local real estate information.
Jennifer Shannon is a Texas real estate agent and broker, licensed since 2006.