Appealing Property Taxes for Your Home: Obtain a Homestead Exemption

Property taxes are a substantial expense for Texas homeowners, averaging about $3,600 annually. The largest and simplest way to reduce property taxes for your home is to obtain a homestead exemption.

Homestead exemptions reduce the taxable value of your home, typically by 20%. For example, if your home is assessed (for property taxes) at $150,000, and you qualify for a $30,000 exemption (20%), you will pay taxes on the home as if it was worth $120,000. This would reduce your property taxes by $450 per year, based on a 3% tax rate.

To qualify for homestead exemption, a home must meet the definition of a residence homestead:

• The home’s owner must be an individual (for example: not a corporation or other business entity) and use the home as his or her principal residence on January 1 of the tax year. An individual can own the home directly or through a qualifying trust.
• A homestead can be a separate structure, condominium or a mobile home located on owned or leased land, as long as the individual living in the home owns it.
• A homestead can include up to 20 acres, if the land is used as a yard or for another purpose related to the residential use of the homestead.

The application for residential homestead exemption, found at www.cutmytaxes.com, should be filed with the county appraisal district between January 1 and April 30 of the tax year — up to one year after taxes are due. During the year, if you turn 65 or become disabled, you must apply for the 65 or older or disabled exemption no later than one year from the qualification date. Once you receive the exemption, you do not need to reapply unless the chief appraiser sends you a new application. In that case, you must file the new application.

Patrick O’Connor, a designated member of the Appraisal Institute, is president of O’Connor & Associates. The firm, in business since 1974, specializes in real estate appraisals, research, and state and federal tax reduction services nationwide. With offices in Houston, Dallas, Los Angeles and Newport Beach, the firm employs more than 130 people. Patrick O’Connor is frequently acknowledged by national publications as a respected source of information on real estate. Visit www.cutmytaxes.com.

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