What are the Different Types of Property Tax Exemptions in Texas?

Spiraling property tax bills can create financial headaches and hardships for the average Texas homeowner. But did you know that Texas offers exemptions to residential property owners that could lower your property taxes? Whether you own your primary residence, are a senior citizen, or have a disability, these valuable exemptions can save you hundreds or more dollars every year.

Why Should I Apply for Exemptions?

Local governments in Texas primarily raise revenue through property taxes. These taxing districts fund various services, like schools, roads, police, fire departments, etc. However, these taxes can place significant burdens on ordinary Texas homeowners.

Your property taxes are calculated by your county’s local appraisal district. The district issues an assessed value of your house that is supposed to be based on fair market value. This assessment is then applied to all the various tax rates in your area. So, if you have a home assessed at $300,000 and the school district has a 1% tax rate, you will pay $3,000 annually in property taxes to the school district.

A Texas tax exemption lowers the assessed home value your local tax rate is applied to. If you have a $300,000 assessed value and apply for and receive a $25,000 exemption, your local school district will apply its 1% tax to $275,000, not the full $300,000 home assessment. This will quickly save you $250 a year, as you now owe $2,750 in school taxes.

Keep in mind that you must apply for property tax exemptions in Texas, as they are not simply deducted from your bills. So, make sure you apply for the applicable exemptions before this year’s deadline!

What Types of Exemptions Are Available?

You need to meet eligibility requirements to claim any property tax exemptions. The following are the three most common exemptions for which ordinary homeowners may be eligible in Texas.

Residential Homestead Exemptions

The residential homestead exemption applies to any individual who owns their primary residence. To qualify, you need to own your own home and not have it titled in the name of an investment vehicle or company like an LLC. The home must also be your primary residence. 

To be considered your primary residence, you must live in the home more than half of the year. Typically, evidence of a primary residence includes having the house’s address on your driver’s license, receiving mail at the home, and listing the house as your billing address. Additionally, you cannot claim a homestead exemption on any other property, whether that house is in Texas or another state.

Every school district in the state is required to offer a residential homestead exemption of $25,000. However, each local taxing district can offer additional optional exemptions up to 20% of the home’s assessed value.

Exemptions for Senior Citizens and Disabled People

Homeowners who are over the age of 65 or have a disability can receive an additional $10,000 residential homestead exemption for their school district taxes. Other taxing units may choose to offer an additional exemption amount of at least $3,000 to senior citizens and disabled homeowners.

Exemptions for Disabled Veterans

Texas offers additional residential homestead exemptions for disabled veterans or the surviving spouse of a disabled veteran. The amount of the exemption will vary based on a formal disability rating.

What is a Property Tax Protest?

Although there is no guarantee that your tax exemption applications will be approved, Texas residents can appeal any denial. However, while exemptions can be helpful, it is a property tax protest that can create significant savings for Texas homeowners.

Because a successful property tax protest will lower your home’s assessed value, it will reduce all of your property taxes, not just your bill from one or two taxing units. Additionally, tax exemptions will be levied against the new, lower assessed value after a successful property tax protest.

Sign up for our commitment-free services today to have Watchtower Protest handle your property tax protest for you. Our professionals have years of experience navigating (and winning) Texas property tax protests. We can prove that the assessed value of your home is too high and assist you in securing lower tax bills. And if we don’t get your property taxes reduced, you won’t owe us a thing.

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