The Nitty Gritty on Texas Homestead Property Tax Exemptions
Questions on property taxes and property tax exemptions are some that I get asked by clients regularly. How much will my taxes be? What discounts am I eligible for? Why should I file for an exemption? All are excellent questions and well worth asking!
Generally speaking, property taxes are determined and collected on the local level. In Palestine, property taxes are managed by the Anderson County Appraisal District (ACAD). I won’t get into how property taxes are determined for the purposes of this post, but just know that ACAD is the one that determine your property’s appraisal value (another important note: YOUR PROPERTY TAX APPRAISAL IS NOT FAIR MARKET VALUE!!—but that’s another convo for another day…haha!)
An easy way to understand property tax exemptions is to think of them as “property tax discounts.”
There are many different types of exemptions, such as:
- Homestead Exemption
- Over 65 Exemption
- Disabled Exemption
- Veterans Exemption
- Charitable Organization Exemption
- Historic Exemption
The most common of the exemptions is the Residence Homestead Tax Exemption. Lucky for us, it is also the easiest to apply for!
DO YOU QUALIFY?
The only specific requirements to qualify for a residential homestead exemption in Texas are:
- You must own the property. (note: title must be held in a person’s name, not an entity or business name)
- You must live in the property as your primary residence
HOW MUCH IS THE DISCOUNT?
- Every county’s exemption discounts are difference and specific to the state, county and school district’s tax rates, so there is no blanket answer (unfortunately!!). However, there are general State guidelines that must be followed.
- School districts are required to offer a minimum $15,000 exemption.
- Any taxing unit (city, county, school district, etc) can offer up to 20% off of appraised value (but not less than $5,000).
- A county can also offer a $3,000 exemption if it collects for Farm-to-Market (FM) Roads or flood control.
- You can homestead up to 20 acres. If you own more than 20 acres, you are still eligible; however, only 20 acres of the property will be tax exempt.
- In Palestine, both Palestine ISD & Westwood ISD currently offer a $15,000 credit on the homestead exemption. However, tax rates are subject to change, so please check here for the most up to date exemption rates.
- If you are over 65, disabled or a veteran, you are eligible for other discounts. Please look into filing for those exemptions in addition to your homestead, as they offer another tax savings. (I am not going into depth on these exemptions in this post, but go to your local appraisal district’s website for more info.)
WHEN & HOW DO TO FILE?
- When to file—You can only receive the tax discount starting on the first January 1st of living in the home. (For example, if you moved in after January 1, 2014, you need to file your homestead in January 2015. The deadline for filing for the tax year is May 1st of that tax year.)
- How to file—Download the form (The form is a state form, so is the same for any Texas property) and return it in person or via mail to your local appraisal district. In Palestine and Anderson County, return the form in person or by mail to:
Anderson County Appraisal District
801 N. Perry St.
Palestine, TX 75801
- How often?—You only need to file your homestead exemption once. It carries over until the property is sold or transferred.
That is the 5 minute explanation and how to file on your East Texas Property Tax Exemption. I hope this general information helped give a quick explanation and to clarify some FAQ on Homestead Property Tax Exemptions. The laws are somewhat tedious and specific, and I am not a lawyer or CPA, so if you have specific legal or tax questions, always talk to your lawyer or CPA. Please note that this post is not a substitute for legal or tax advice and all regulations and laws are subject to changes, so always verify current statutes.
Lisa E. Priest is a born and raised Texan for life and East Texas Area REALTOR® / Real Estate Agent with Picket Fence Realty, Inc.
You can call her via phone or text at 903-948-3343 or email [email protected]