BEHIND THE SCENE
A big change in the Residential Homestead Exemption law took effect January 1 of this year, and it will potentially save new homeowners big time on their 2022 property taxes. So what exactly does this new law mean to you? In short, it means you can now get a residential homestead exemption anytime during the year when you buy a home, you don’t have to wait until January 1st of the next year, as homeowners have in the past.
To explore this subject more deeply, let's first look at what a Homestead Exemption is—it is an exemption granted by the county appraisal district where the property is located. The exemption reduces the homeowner’s property tax bill by removing part of the home’s value from taxation.
A homestead can be a house, condominium, or a manufactured home. It can include up to 20 acres if the land is owned by the homeowner and is used as a yard or other purpose related to residential use of the home.
All Texas homeowners are eligible to apply for General Residence Homestead Exemption for their primary residence. It should be noted other exemptions (with additional requirements) are available to homeowners who are over 65, Veterans, or disabled through this same application process.
Until now, under the Texas Property Tax Code, a lien would arise each January 1 for the payment of ad valorem taxes for the year. The process to determine the value of property and the entitlement to any tax exemptions would begin as of January 1 and the the tax collector would generate a tax bill in the fall. Then taxpayers got to pay their tax bills for the current year on or before January 31 of the following year.
Under the new Residential Homestead Exemption that takes effect on January 1, 2022, the exemption will now be available anytime during the year—not just on January 1. But there is one important caveat—the property must have been capable of serving as a homestead as of January 1, 2022. So if it is a new construction home that wasn’t complete and habitable by January 1, 2022, then the purchaser will still have to wait until the following year for the exemption entitlement.
In order to qualify for Homestead Exemption you and your property must meet the following:
- You must own your home and complete an application for Residential Homestead Exemption. (Applications are available on the Texas Comptroller’s website and most county appraisal district websites.)
- You must be an individual homeowner to receive homestead exemption. Corporations or other entities need not apply. However some appraisal districts will qualify Family Trusts.
- You must only claim one property at a time in Texas as a homestead.
So there you have it. New 2022 year. New 2022 property tax law. Make certain you’re getting the exemptions you deserve.
I’m Suzanne Athey, owner and founder of Team Athey & Remarkable Property Management. I hope you found this blog post informative. If you’d like to know more, please call me at469-916-1222, or email me at suzanne@teamathey.com. I’d love to visit with you and answer all your home buying and selling questions.
