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Texas Homestead Exemptions | Patten Title Company
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January 4th, 2022

Texas Homestead Exemptions

A homestead exemption reduces taxes by lowering a home’s taxable value. All school districts offer a $25,000 homestead exemption, and some taxing units offer additional optional reductions for the homestead exemption.

There is a new update to the Homestead Exemption Law. Starting January 1, 2022, homebuyers will be allowed to file for exemption in the year they purchased the property – previously homebuyers had to wait until the following calendar year to file. This is great news for homebuyers who can now have the opportunity to lower their property taxes!

How does this affect prorations?

Previously, prorations of taxes between the Buyer & Seller, and reserves needed for Buyer’s new escrow accounts, were estimated using the homestead exemption because it was in place until the end of the year. Now, a Seller can buy a new property and move their exemption to that new property immediately. Make sure you are discussing with the Buyer & Seller whether they want to apply the current exemption to the taxable value when prorating taxes at closing.

What is a Homestead Exemption?

A homestead exemption reduces taxes by lowering a home’s taxable value. All school districts offer a $25,000 homestead exemption, and some taxing units offer additional optional reductions for the homestead exemption. Homeowners can lower their property taxes by applying for these exemptions for which they are eligible.

Who Qualifies?

These requirements must be met to receive the exemption:

  1. You must own your home during the year for which you are applying*. (If you are over 65 and/or disabled, January 1st ownership and residency are not required.)
  2. Only individual homeowners (not corporations or other entities) may receive a homestead exemption.
  3. A homestead can be a house, condominium or a manufactured home. It can include up to 20 acres, if the land is also owned by the homeowner and used as a yard, or for another purpose related to the residential use of the home.

How do Homeowners Apply?

  1. Complete the APPLICATION FOR RESIDENTIAL HOMESTEAD EXEMPTION (available on the websites of most county appraisal districts, or at the Texas Comptroller’s website at http://comptroller.texas.gov/taxinfo/taxforms/50-114.pdf)
  2. Include a copy of your DRIVER’S LICENSE or IDENTIFICATION CARD from the Texas Department of Public Safety at www.txdps.state.tx.us. The address MUST MATCH the homestead address.For more information, contact your local county appraisal district office, or visit http://comptroller.texas.gov/taxinfo/proptax/exemptions.html