It’s Homestead, Sweet Homestead in the State of Texas. Our Texas constitution can help prevent Texans from becoming homeless if they are in a financial bind. Texas homestead protection laws guard your homestead against foreclosure by judgment creditors such as credit card holders, bill collectors, or winning parties in lawsuits.

This special protection from creditors only extends to the homestead. There are a lot of legal definitions of a Texas homestead, but basically, it is a primary residence owned and lived in by a family or single adult. You can only have one homestead entitled to be exempt from seizure by claims of creditors. If the property is not a homestead, the creditor has the right to go after that property to satisfy a lien.

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homestead

Photo courtesy Flickr

 

Easter is over, but we’re going to quote a rabbit anyway — if you’re waiting to file your homestead exemption for your property taxes, you may find yourself late, late, for a very important date.

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By Lydia Blair
Special Contributor

A reader writes: “I bought a home in 2018 and my taxes are escrowed by my mortgage company. How do I get a homestead exemption to get a discount on my taxes? Do I need to repeat the process every year? How much does it save me?”

You most definitely want to know how to file for a homestead exemption for your 2019 property taxes. To get a homestead exemption, you must own and live in the property as your principal residence as of Jan. 1 of that tax year. So, if you purchased in 2018, you may apply for that exemption after Jan. 1, 2019.

A homestead exemption removes part of your home’s value from taxation, so it lowers your taxes. I don’t know the details about your home to tell you how much a homestead exemption can save on your property taxes, but it is generally about 20 percent. Given the property tax rates in Texas, it is worth the few minutes it takes.  

To qualify, your home must also be owned by you as an individual (or individuals). A corporation or other business entity doesn’t qualify for this exemption. Do not pay someone else to do this for you. It is free and you can do it online in a few minutes.

Here is a step-by-step guide for how to apply for a homestead exemption in the DFW area:

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By Lydia Blair
Special Contributor

After the paperwork has been signed and you’ve been handed the keys, there are plenty more expenses involved in moving into your new home — packing supplies, connecting utilities, hiring movers, new appliances or furnishings, etc. However, there are certain costs after buying a home that new homeowners should not incur despite a barrage of letters telling them differently.

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DCAD on the road1
Comes word from our on-staff Tax Doctor, Rob Wheelock, of Property Tax Managers, that it’s that time of the year AGAIN: property tax appraisals.
2015 Property Tax Statements are usually mailed out starting the first week of October, and they have been for all non-homesteaded properties. But the Dallas County Appraisal District is holding back on mailing out notices of appraised value on HOMESTEADED properties because of the November 3 election that will increase the homestead exemption from $15,000 to $25,000, if approved by voters. 
Think it’s going to be approved? I sure do!

The Texas Homestead Exemption for School District Property Taxes Amendment, Proposition 1 is on the November 3, 2015 ballot in Texas as a legislatively referred constitutional amendment.[1]

The measure would increase the homestead exemption from property taxes levied by school districts from $15,000 to $25,000.[2]

Depending on their district, homeowners would save an average of between $120 and $130 per year, which would cost the state about $1.2 billion in tax revenue for school districts over two years. Senate Joint Resolution 1, the enabling legislation, would make up for the lost revenue by entitling school districts to additional state aid from the Foundation School Fund.[3]

The proposition also maintains the additional $10,000 exemption for seniors and disabled homeowners already awarded under current law, along with the proposed increase for all other homeowners.

The exemption was last increased in 1997, when voters approved Proposition 1.[4]

The amendment would take effect January 1, 2015.[1]

The Dallas County Appraisal District wisely thought of saving money with only ONE mailing. They are saving paper, as well. I imagine it’s the same in Tarrant and Collin Counties, yes?
Smart people. I wish they could teach the folks at the IRS a few lessons about resource savings…

Don't Mess with Taxes

Wallet Hub did a very interesting analysis when it comes to the various tax systems employed by individual states in the nation. Come to find out, Texas’ tax system, which relies heavily on property taxes to fund our government services, is rated as one of the most unfair tax systems. Of course, after our recent spate of good fortune in the housing market, it’ll be interesting to see how much homeowners are going to end up paying in 2015. And what about all of the capital gains folks are going to have to pay on those record-breaking sales?

Next April is going to hurt, that’s for sure.

Jump to see the how Texas measured up:

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A reader writes, our Tax Doctor Tiffany Hamil responds:

Dear Candy: I am confused by the age 65 homestead deal in our state. Is it the same in each county? When you turn 65 do you get a break on your property taxes or are they just frozen? I understand this is because property taxes support public schools, or at least initially they did, and the philosophy is that once we hit 65 we have no more children in the public schools. We are 60 and trying to figure out if we should remain in our home for another five years to get this benefit, or move now. Our home is on the tax rolls at $1.29. Thanks!

Obtaining an “Over 65 Exemption” does 2 things:

1. You receive an additional exemption off of your appraised value. The State mandates an additional $10,000 exemption amount for school districts, but the actual exemption amount varies not just county to county, but from taxing entity to taxing entity. Most homeowners in Dallas are in 5 different taxing entities. The exemption in Dallas could vary from $3,000 to $69,000.

2. The Over 65 Exemption also establishes a CEILING– It is a limit on the amount of taxes you must pay on your residence. If you qualify your home for a 65 and older or disabled person homestead exemption for school taxes, the school taxes on that home can’t increase as long as you own and live in that home. The tax ceiling is the amount you pay in the year that you qualified for the 65 or older or disabled person exemption. The school taxes on your home may go below the ceiling but not above the amount of the ceiling. However, if you improve the home (other than normal repairs or maintenance), the tax ceiling may go higher because of the new additions. For example, if you add on a garage or game room to the house after you have established a tax ceiling, the ceiling will be adjusted to a higher level to reflect the value of that addition.

If you are nearing age 65 and are considering relocating, it is advisable that you examine not only the tax rate, but also the exemption amounts for the future homestead. The tax tables can be obtained at the appraisal district’s website. If these tax tables look like mumbo-jumbo to you, call our office and we can assist with this analysis.

-Tiffany Hamil.