Understanding the Texas Homestead Exemption: Save on Your Property Taxes
In this comprehensive guide, I delve into the essentials of the Texas Homestead Exemption. Whether you’re a homeowner in Tarrant or Parker County, or anywhere in Texas, this video is a must-watch to understand how you can significantly reduce your property taxes.
✅ Who Should Watch?
Homeowners and new buyers in Texas seeking to lower their property taxes and navigate the homestead exemption process.
👉 Why Watch?
– Get updated on the latest changes in the homestead exemption amount for 2024.
– Understand the impact on your school tax rates and overall property tax.
– Avoid common mistakes and scams post-home purchase.
– Learn how to file the exemption retroactively for missed years.
0:33 What is the Texas Homestead Exemption?
0:47 What does the Homestead Exemption Do?
1:27 How to determine your new tax savings in 2024
2:30 Market Value Vs. Assessed Value
3:30 Homestead tax increase cap
4:40 How to find the homestead application
5:14 How to qualify for the homestead exemption
6:20 Can I file late?
7:15 Filling out the homestead exemption application form
10:50 When should I file the application?
🔗 County Links:
📞 Need Help?
Questions or need assistance? Drop a comment below or reach out through email. I’m here to help you with your homestead exemption queries!
[00:00:00] Hey friends, thanks for tuning in today, I’m actually going to show you a little bit about the Texas homestead exemption so this video is kind of for two reasons one to give you a little bit of an overview of How to fill it out like what you actually need to do and then a brief touch on like why Like, what’s important about the Texas homestead exemption and, and the application and what it does for you.
So first off, what, what is this homestead exemption? So if you have a, a home that is your primary residence in Texas, no matter where it is in Texas you can file for this homestead exemption. It does two things primarily, it has a couple of other benefits, but primarily the, the The two biggest things it does is it’s going to exempt you from paying a portion of your property taxes.
Now, the state [00:01:00] regulates that that exemption must apply to the school portion of your taxes, like the, the, the ISD that you are paying taxes to, which is typically the biggest portion of your property taxes in Texas. And this year, I guess it’s 2024 now, but in late 2023, they increased the homestead exemption amount from $40,000 up to $100,000.
So what does that mean for you? In order to figure out exactly what savings that actually like equates to you, what you have to do is you have to go to your. Your tax assessor or your county website and find the tax rate for the school district that you’re a part of. And then you can take that tax rate, apply that to the difference.
So $60,000, that’s the increase. So if the tax rate is 1. [00:02:00] 2%, that’s $60,000 times, 1.2 percent, that’s $720. That’s, that’s the new savings that you have beyond what you were originally paying. So, that’s what that does. It’s going to exempt you from paying a portion of It’s guaranteed to be your school taxes.
Now counties can also apply that exemption to the other taxing authorities, but they’re not required to. So it reduces your taxes. Secondly, What the homestead Exemption or the homestead application will do is it gives you kind of this homestead protection on the on the value that the county’s tax You at so you have multiple values for your home according to the county you have what they call your market value That’s what they’re saying your home is worth.
You’re not taxed on that. That’s just what they’re saying your home is worth Then you have your true market value. That’s if you actually sold it. What will it actually sell for? So the county market [00:03:00] value is not always exactly what your home would actually sell for. And then you have your assessed value.
The assessed value is what they are charging you taxes on. And so that’s what really that’s, that’s what turns into dollars and cents for you and your bank account every year. This is not a video about protesting your taxes. That’s maybe a different topic. But on the assessed value, having a homestead exemption on your property caps how much they can increase the assessed value.
Now, the market value is totally separate. They can always set that at market value. The assessed value can only go up by 10 percent each year if you have The homestead exemption on your property. So let’s jump into this real quick. I’m gonna show you Tarrant County, that’s where you know, I do a lot of a lot of my business in Tarrant and Parker County Parker just doesn’t have its own website.
It’s like [00:04:00] done by a third party. So Tarrant County is easier to show you the website and The actual application is going to be similar across Multiple The application is going to be similar across pretty much all the counties might be slightly different and I’m going to have links to most of the counties here in North Texas and the DFW area so you can jump to your county if you’re not in Tarrant or Parker County.
Now, if you have questions after this video, you need some help, feel free to reach out, you know, comment below if you’re watching this on YouTube, send me a, you know, just reply to the email if you’re getting this via email. But what we’re going to do is we’re going to come over here and you’re going to go to TAD.
org. That’s Tarrant County Appraisal District. And, right now, they actually have a direct link. If you are coming here and you don’t see this, you know, there’s gonna be and they’ve updated their website recently, so you’re gonna go to like, all forms, and you can find it that way. But again, I’m gonna have a link for you, so don’t, don’t worry too much about this.
So we’re gonna click here, [00:05:00] and this is actually gonna go over some of the information that I just explained. What is the extent, exemption, who can file, how can you file, what does it do? So before you file, and we’ll go over this in a second. You do actually have to own the property or have owned the property and then your IDs, your driver’s license, whatever ID you are going to send in, you have to have that address on those identifications that you’re going to send in to prove that that’s where you live.
So if you bought a home today, you can’t actually file this tomorrow because you’re going to have to send in copies of your ID and so you have to wait until your IDs get updated. So, there is no fee, so I have a lot of clients after closing, they get these forms in the mail saying, you need to file your homestead, here’s $35, $65, and it looks like a real official document.
If you ever get anything that looks official, you might get stuff about mortgage insurance death benefits if you die and paying off your mortgage. [00:06:00] Always look at the bottom section. It might even have your lender’s name up there somewhere. Look at the bottom piece of that piece of paper, and most of the time, those things are going to say that they’re advertisements, they’re not affiliated with the county or with your lender.
So if you get those, you can totally disregard them. Filing your homestead exemption is 100% free, and you should always do it. There is no reason not to do it. You should even file your homestead exemption, even if I actually had a client recently, you know, they, they moved in, the husband and wife thought the other person was going to do it.
And then, you know, two or three years later, they’re moving it never got filed. Well, you can actually file this retroactively because, you know, if you forgot to file it two years ago, you can still file it and you can get the benefits from the prior two years. I’ve had friends that I let know about this and they actually got, tax refunds from the county because they had paid on the full assessed value when they should have only been paying on the the value minus the exemption.
So we’re going to scroll down here. We’re going to come straight [00:07:00] here again. You’re going to have links to these. Now there are some additional benefits if you’re over 65 or disabled. That’s not the topic of this video, but that actually can freeze some of your taxes. So you’re going to come here to the application for residential homestead exemption.
Now one thing to note is if you are married or there are two owners listed on title. Both of you should send in a copy of your identifications. So unfortunately, you can’t, you cannot do this online yet. I don’t know why, but they make you print this out and you got to mail it in. So, so make a photocopy of your IDs, send it along with it.
You’re going to fill out everything that’s applicable. There may be things that are not applicable. I’m going to jump down to, you know, so some, some forms, like maybe if you’re in a different county. They’re going to ask for manufactured home, make, model, ID number. If you don’t live in a manufactured home, you [00:08:00] just leave it blank.
So here’s another thing that you might have trouble with. Legal descriptions. That while they might be able to do it off just your street address, it ideally you want to use the legal description. That’s your lot block in addition number and name. So if you don’t know this, it’s going to be on the contract from when you purchased your home.
It’s going to be in the title company documentation. If you don’t know it, can’t find it, can’t find those docs, feel free to reach out to me. Whether you’re a client or not, I’m happy to help and, and we’ll get you that legal description. So, here’s the thing, these double asterisks, they, they want you to have a lot of this info.
I’ve never had to include, a deed filing. it. I’ve never had to do it, had clients not do it. And so it’s not a huge deal. You do want to provide your [00:09:00] information. You do want to make sure that when you bought the home, it’s helpful if the mailing address of the property that you live in is the property that you live in.
I’ve had clients who When all the documentation got filed from the purchase, they bought a new home. They’re living in the new home, but for some reason the tax billing address was their other residence, and so they had to update that in order to Qualify as well. So you’re going to fill out the information that’s applicable.
If it’s not, you can leave it blank. You, you’re probably not going to be exempt from, from showing proof of residence. So have your driver’s license ready. For most of you, you’re only going to get the general residence homestead. If you’re over 65, you’re also going to get this one. So disabled, you get this one, disabled veteran.
Just make sure, read through this. Mark down whatever you qualify for. If you’re unsure, you [00:10:00] can call the county directly. Feel free to call me first and I’ll, I’ll help any way I can. Occasionally on some weird ones, I’ll be like, Hey, we, you really need to talk to the county, but come through here. You know, these tax limitations probably not going to apply to most people.
And then you’re going to need to sign and date. And then again, you mail this to the county at this address. And you’re going to send in copies of your IDs. So again, most counties forms are going to require very similar information. So I wouldn’t worry too much that I didn’t go over all the different forms.
If you have questions, feel free to reach out, but it is important to file this. You can now file this immediately once you meet the criteria, you own the home and you have your updated IDs. It used to be that you couldn’t even file it till after the first of the year that you lived in the home. [00:11:00] But especially now, you should be filing this.
It’s January 2024 as I’m recording this. You should be filing this. They are recording this. And then these exemptions are being applied to properties now. So, make sure you get this filed before they start doing taxes this year to make sure, to make sure that you’re getting whatever benefits you should be getting.
On your property taxes. So thanks for watching and have a great day.
Frequently Asked Questions
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There are several reasons Texas is considered relatively affordable for buying a house compared to many other states.
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