February 21, 2023

Prorated Homestead Exemption in Texas - What is it and how to claim?

What is prorated homestead exemption in Texas?

Homeowners who purchased their homes after January 1st 2022 can claim their general homestead exemption for the remainder of the year. This was made possible by Senate Bill 8. To claim a pro-rated exemption:

  • the homeowner must be residing in that new home. i.e., it should be their primary residence.
  • the property should have been purchased on or after January 1st 2022.
  • the property cannot already have a general residence homestead for the rest of the year. i.e, if the previous owner had claimed HS exemption on it for the year, then the new owner will not be able to claim a pro-rated HS exemption for that year.
  • the property owner cannot already be claiming homestead exemption on another property for that year.

If you apply during the middle of the year, then the exemption amount will be based on the qualification date. e.g. here is an example on how to calculate prorated homestead exemption.

Purchased on1st April 2024
Exemption claimed on1st July 2024
Days remaining in the year183
Proration percentage (183 / 365)50%
Prorated Exemption Amount (50% of $100,000)$50,000

Note that you still have to wait a year for your homestead cap to take effect.

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