While income tax is the norm for most places in the United States, Texas stands out as one of several states without income tax. To help fund state programs and services, Texas makes up for the tax revenue that other states collect each year by levying higher property taxes for homeowners when they file their taxes. For first-time home buyers and owners, this bill can come with a bit of sticker shock when tax season rolls around.
However, the state also offers something called a homestead exemption, which is designed to help homeowners save on their annual property taxes.
Find out what you need to know about homestead exemptions in Texas, including how they work and how you can file for an exemption.
What is a Homestead Exemption?
The average effective property tax rate in Texas is 1.6%, which is almost double the average national rate of 0.99%. With that said, these rates vary by location. For example, Legend Homes communities can offer property tax rates from 1.4% in San Antonio’s Dauer Ranch to 3.63% in Willis’s Ridgeland Hills.
Per SmartAsset, the average Texas homeowner pays $3,797 in property taxes each year. That’s a pretty expensive bill! Thankfully, the state offers a homestead exemption for qualifying homeowners. According to the Texas Comptroller ...
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A partial exemption removes from taxation a certain percentage or fixed dollar amount from a property’s value.
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A full exemption excludes a property’s entire value from taxation.
In other words, by completing a homestead exemption application, you can save money on your annual property taxes. In 2024, the average homeowner who received an exemption saved approximately $1,200.
Who Can Apply for a Homestead Exemption?
General residence homestead exemptions are available to people in residential homes who own and reside at the property as of January 1 of the applicable year. This exemption is only available on an applicant’s primary residence. In other words, vacation homes, investment properties, and other residences don’t qualify for exemptions.
There are also numerous other homestead exemptions available to people who fit certain criteria, including individuals over the age of 65, disabled individuals, veterans, and more. The full list can be found by visiting the appraisal district website for your county.
How Do you Apply for a Homestead Exemption in Texas?
Homeowners can apply for a homestead exemption in Texas by completing three easy steps:
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Step 1: Complete Form 50-114. This easy-to-fill-out form ask simple questions and requests basic information regarding the property in question, including when it was acquired and when the occupants first began living in it.
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Step 2: Submit the Form. Deliver the form and applicable documentation (including driver’s license) to the appraisal district in each county in which the property is located.
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Step 3: Finish Your Taxes. Complete your annual tax return by April 15 to receive the exemption in your filing.
In general, the annual filing deadline is May 1. To learn more about homestead exemptions, visit the Texas Comptroller website.
