It is that time of the year when I remind my clients to mail in their homestead exemption application. You can file anytime between January 1 and April 30, but for a variety of reasons we humans tend to wait until the last minute.
There are a few reasons why it is important for you to file your exemption. Texas homestead provisions fall into three categories: homestead exemption from taxation, homestead protection from creditors, and the homestead right of occupancy.
Homestead Tax Exemption
The most common reference to the homestead exemption is to the exemption from ad valorem taxation. This category permits a certain portion of the appraised value of a principal residence to be excluded from the taxable value. In most Texas school districts, residence homesteads are allowed an exemption of $25,000 of the home’s value for school taxes. Besides the homestead exemption, there are several other forms of tax relief that may reduce your taxable value:
• Over 65 exemption
• Disabled individual exemption
• Disabled veteran exemption
• Agriculture land exemption
Protection from Creditors
The homestead of a family or single adult is protected from forced sale for the sole purpose of paying debts and judgments. Although there are some exceptions. A homestead may be taken for purchase money liens (i.e. loans taken out for the purpose of buying the property), home equity, refinance transactions, taxes, mechanic’s and materialman’s liens, reverse mortgage, certain home improvements and owelty liens.
Homestead Right of Occupancy
Homestead rights also include the right to occupy the property. The right of occupancy extends to all family members who continue to occupy the property, including those who occupy the property after the owner’s death. This protection applies to:
• a spouse
• a surviving spouse
• minor children
• unmarried children
Applying for Texas homestead exemptions are the responsibility of the homeowner. In order to qualify for a Texas homestead exemption(s), you must own and be living in the property as of January 1 of the year for which you are requesting an exemption. When submitting your completed application to Central Appraisal district, a copy of the applicants Texas driver’s license or Texas identification card is required and must have the same address listed on the exemption application, otherwise the Chief Appraiser will not approve the exemption. Your application must be returned on or before April 30 to receive tax benefits for the year.
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