January 18, 2021

Understanding property tax exemptions in Texas.

In Texas, property tax is assessed and administered locally. Texas offers a variety of exemptions from property taxes for properties and/or property owners that qualify. These include several partial or total (absolute) exemptions from property appraised values.

A partial exemption excludes either a percentage or a fixed dollar amount of the value for taxation, while an absolute or total exemption means the entire property is exempted. The state mandates certain exemptions that local taxing units must offer. The others are optional and can be decided locally.

Most exemption cases depend on at least one of the following:

  1. The owner's eligibility for exemption.
  2. The property's eligibility for exemption.
  3. The property's use.

Ownership Qualifications

Exemptions applicable for individuals or families usually require evidence of the owner's age, physical condition or disability, military service, family relationships, death certification and others depending on the exemption being claimed.

January 1

The date to determine the owner's qualification for property tax exemptions is January 1, with some exceptions. The exception includes a provision for immediate property tax exemption upon the owner's death, change in age, change in physical condition or a property's acquisition date, provided all legal requirements are fulfilled. A property receiving exemptions for freeport, abatement, pollution control, historic or archaeological site, solar and wind-powered energy devices, offshore drilling rigs, water conservation initiatives and disabled veterans must qualify on January 1.

Immediate exemptions

Immediate exemptions on property tax can be claimed if the property owner is an individual who:

  1. Reaches the age of 65 during the year.
  2. Becomes disabled during the year.
  3. Owner dies in the year, having reached the age of 65 in the same year or before, provided the surviving spouse is 55 years of age or older to qualify for the deceased owner's exemptions.
  4. Is a disabled veteran or their surviving spouse with a home donated by charitable organizations.
  5. Is the surviving spouse of a U.S. armed services member killed in action.
  6. Is the surviving spouse of a first responder killed or fatally injured in the line of duty.

Immediate exemptions on property tax can also be claimed if the property is owned by organizations such as cemeteries, charitable organizations, religious organizations, private schools, low-income housing organizations, youth development associations, nonprofit water supply and wastewater service corporations, veteran’s organizations and other nonprofit organizations.

Public use property

When the state, a political subdivision of the state and other qualifying organizations acquire property used for public purposes, the chief appraiser determines the property’s exemption qualifications as of the acquisition date.

Precious metal depository

Precious metals held in a depository in Texas qualify for an exemption.

Heir Property

Property that is acquired by will, transfer on death deed or intestacy is Heir Property. It is owned by one or more individuals, where at least one owner claims the property as a residence homestead. In the case of multiple owners, an heir property owner who does not identify as the residence homestead owner on any recorded instrument or deed must provide:

  • an affidavit establishing ownership of interest in the property.
  • a copy of the prior property owner’s death certificate.
  • a copy of the property’s most recent utility bill, and
  • a citation of any court record relating to the applicant’s ownership of the property, if available.

Property Qualifications and Use

Many property tax exemptions only apply to certain classes of property. Requirements to be met include the residence intention or status, condition of the property if rendered uninhabitable or unstable, property acquired by a qualifying body for public use, property acquired by a charitable, religious or educational organization among other factors. How and when the property owner uses the property is often critical in determining exemption cases. An important factor is whether a property’s use is exclusive, primary or incidental.

You can know more about the Types of Property Tax Exemptions you can claim in the state of Texas.

A property owner must apply for exemptions from property tax in most cases. Failing to file the required application on time can result in forfeiture of the right to claim the exemption.

Learn more about applying for a property tax exemption here.

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Articles presented here are for general information and education only. It is provided as a courtesy to the general public. SQD Taxtech LLC does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors or persons quoted as of the date of the article with no obligation to update or notify of inaccuracy or change. This article may not be reproduced, distributed or further published by any person without the written consent of SQD Taxtech LLC. Please cite source when quoting.

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