Are you a homeowner in Texas? If so, you may be eligible for a property tax exemption called the homestead exemption. This exemption can save you money on your annual property taxes. However, there is a new law you need to know about.
What is the Texas Homestead Exemption?
The Texas homestead exemption removes part of the value of your home from taxation. This lowers the taxes you pay. To qualify, the home must be your principal residence on January 1 of the tax year. Additionally, you must own the property and reside there.
The exemption amount varies by taxing entity. For example, the state homestead exemption is $25,000. School districts can offer up to a $40,000 exemption. Counties, cities, and special districts set their own exemption levels as well.
The New Homestead Exemption Law
In 2023, the Texas legislature passed a new law impacting homestead exemptions. Section 11.43 (h-1) of the Texas Property Tax Code now requires homeowners to confirm their homestead exemption eligibility every 5 years.
Specifically, each county appraisal district must implement a process to verify that residential properties still qualify for their homestead exemptions once every 5 years. This new law went into effect on September 1, 2023.
The goal is to ensure only eligible homeowners receive the exemption. Consequently, homeowners may need to provide documentation periodically to confirm their primary residence and ownership status.
Why It Matters
The homestead exemption can result in significant property tax savings for Texas homeowners. For instance, with the state’s $25,000 exemption, a home valued at $300,000 would only be taxed on $275,000 of the value.
However, if you fail to confirm your eligibility when required by your appraisal district, you could lose the exemption. As a result, your property taxes would increase substantially. Therefore, it’s crucial to respond promptly when your district requests confirmation.
Stay Informed
In summary, the Texas homestead exemption provides tax relief for homeowners, but a new law requires periodic confirmation of eligibility. Be sure to watch for notices from your county appraisal district. Responding on time will ensure you maintain your valuable homestead exemption.