October 31, 2022

How much does Homestead Exemption save in Texas?

How much does homestead exemption save in Texas?

Homestead exemption gives you $100,000 off on your appraised value for school district taxes. Seniors and disabled homeowners get an additional $10,000 off. Your county government may offer $3,000 off on the appraised value. Other taxing units may offer upto 20% off with a minimum of $5,000. They may also offer seniors and disabled persons an additional $3,000 off on the appraised value.

  1. School district: All property owners are allowed an exemption of $100,000 on their residence homestead. If a home is appraised at $350,000, then a residence homestead exemption will bring down the appraised value to $310,000 for the school district. The net effect of the exemption is to reduce your property tax. Considering a 1% tax rate set by the school district, a home assessed at $350,000 will have to pay $3,500 in actual property tax. With the exemption, the tax amount will reduce to $3,100, netting the owner $400 in actual savings. Until 2021, homestead exemption limit was $25,000. Beginning 2022, homestead exemption limit was raised to $100,000. SJR #2.
  2. County government: If the county government collects a special tax for roads or flood control, then a residence homestead can avail a $3,000 exemption on the appraised value. Considering the example above, a county government will value the property at $347,000 ($350,000 - $3,000).
  3. Senior citizen and/or disabled homeowners: Individuals aged 65 or older and disabled persons get an additional $10,000 school district exemption. For a senior citizen or a disabled homeowner, the school district will provide a $35,000 exemption on their assessed value. In case a person is over 65 years of age and is also disabled, they can claim exemption on only one of the criteria i.e., either over 65 or disabled, but not both. On 2nd November 2021, Texas voters approved a constitutional amendment (Prop 7) to allow the surviving spouse of a disabled individual to maintain a homestead property tax limit if the spouse is 55 years of age or older at the time of the death and remains at the homestead.
  4. Veteran's exemption: Texas offers partial to total exemption from property taxes to disabled veterans on their homesteads. We have covered veteran's exemption in detail here. Texas voters recently approved Prop 8 allowing a total residence homestead property tax exemption for a surviving spouse of a member of the armed services "who is killed or fatally injured in the line of duty."
  5. Other taxing unit exemptions: Texas law permits any taxing unit in a county to offer additional exemptions of up to 20% of the assessed value. If they do offer an exemption, then the minimum exemption they have to offer is $5,000. Such taxing units may additionally offer a $3,000 exemption for senior citizens or disabled persons.

Is Texas homestead exemption worth it?

YES! It is definitely worth it. Not claiming your homestead exemption is like throwing away money! You can save a couple of hundred dollars on your property taxes by claiming your homestead exemption. If your school district tax rate is 1%, then you save $400 on your property taxes! Other taxing units in your county may also offer either a fixed exemption or a percentage exemption. If you are a senior or disabled, you get even more exemptions. And the best part is that applying for a homestead exemption is free!

Texas homestead exemption gives $100,000 off the appraised value

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