Don’t Pay More Than Your Fair Share

You may have noticed that your home value has sky-rocketed in the last two years. Know who else has noticed? Your local appraisal district.    

That is bad news for your property tax. A higher home value means a higher property tax. You can protest your property valuation once a year. In the meantime, one good way to whittle homestead property taxes down is to review the available exemptions.  

Property Tax Exemptions

Texas, as a state, does not assess property taxes. Property taxes are local taxes. Exemptions are calculated by each taxing unit. The local taxing units include school districts, counties, cities, junior colleges, and special districts.   

Exemptions come in 2 flavors: mandatory and discretionary. There is a mandatory residential homestead exemption of $3,000 for counties, and $25,000 for school districts.   

Your home could also be eligible for a discretionary exemption. Taxing units, with the approval of their voters, are allowed to exempt up to an additional 20% of value of a residential homestead. If they choose to do so, then the additional exemption must be at least $5,000. The existence of these exemptions must be verified directly with each taxing entity. 

Elderly & Disabled Exemptions

Moving now to the elderly and disabled – school districts are mandated to grant an additional $10,000 homestead exemption to property owners who are over the age of 65 or who are disabled. On the discretionary side, governmental units may exempt additional amounts. As with regular homestead exemptions, the existence of these additional homestead exemptions must be verified directly with each taxing entity.

Tax Freeze

The elderly and disabled may request a tax freeze. Unless a disabled individual or an individual over the age of 65 makes bona-fide improvements to his or her residence, a school district may not assess any taxes over the amount that were assessed when the individual reached 65 years of age or became disabled. Other taxing units may offer a tax freeze as well, but that is not required. 

Interestingly, tax freezes can be carried over to a new homestead property. A qualified person who sells a residential homestead that has a tax freeze may carry the freeze over to a new homestead property on a pro-rata basis.

Valuation Increases

There are limits on valuation increases. The taxable value of a residential homestead after its initial valuation may not be increased by more than ten percent in any subsequent tax year. However, the value of any improvements made to the property may be added to the valuation. The limitation expires on January 1 of the tax year after the property ceases to qualify as the residential homestead of the owner. 

Tax Deferral

Don’t want to pay any property taxes at all? If you are over 65 or disabled, consider a tax deferral. You can defer the payment of your residential homestead taxes until 180 days after the property ceases to be your residential homestead. You do this by filing an affidavit with the chief appraiser stating the request. The affidavit stops all collection processes. Your subsequent taxes accrue interest at the rate of five percent per annum, but there are no penalties.  

Property taxes stop at the grave. Cemetery plots, provided they are not held for profit, are wholly exempted from taxation. 

How do you get an exemption? Ask. Your county’s appraisal district usually has the forms online. Your appraisal district may even, helpfully, post a comprehensive list of exemptions.

Another tidbit: Texas is a non-disclosure state, which means that you don’t have to report how much you paid for your property.   

Hammerle Finley Can Help Make Sense of Your Property Taxes

Do you need tax exemption assistance? One of our experienced attorneys can help. Schedule a consultation today.

Virginia Hammerle is an attorney with Hammerle Finley Law Firm.  She is entering her 40th year in the practice of law and has handled many probate cases.  She is Board Certified in Civil Trial Law by the Texas Board of Legal specialization. Contact to receive her firm’s newsletter.