What is the Homestead Exemption?
In Texas, the homestead exemption is a legal provision designed to reduce the property taxes homeowners pay on their primary residence. It works by exempting a portion of a home's value from taxation, thereby lowering the overall property tax burden.
The New 5-Year Renewal Rule
Traditionally, once a homeowner applied and qualified for the homestead exemption, it remained in effect indefinitely, as long as they continued to occupy the property as their primary residence. However, recent legislative changes have introduced a new requirement – the 5-year renewal rule.
Under this rule, homeowners must now reaffirm their eligibility for the homestead exemption every five years. Failure to do so could result in the exemption being removed, leading to an increase in property taxes.
The introduction of the 5-year renewal rule aims to ensure that the home stead exemption is being appropriately utilized and awarded to those who genuinely qualify for it. By requiring homeowners to reaffirm their eligibility periodically, the state can better monitor and manage exemptions, preventing potential misuse or erroneous claims.
Potential Impact on Homeowners
For most homeowners, the introduction of the 5-year renewal rule should have minimal impact as long as they continue to occupy their property as their primary residence, reaffirming eligibility every five years should be a straight forward process. However, it's essential to stay vigilant and keep track of renewal notices from the county appraisal district. Failure to renew the homestead exemption within the specified timeframe could result in its removal, leading to higher property taxes.
