The State of Texas passed new legislation, so there’s a new and exciting update to homestead exemptions in Texas! We’ll cover what you need to know about the new legislation and what it means for you and the real estate market.
What Is A Homestead Exemption?
A homestead exemption lowers a homeowner’s property tax by removing part of the home’s value from the taxation. The home’s appraised value minus the homestead exemption is what property taxes will be based off. For example, if your home is appraised at $200,000 and you qualify for a $25,000 exemption, you will only pay taxes on a home worth $175,000
In Texas and Williamson County, the homestead exemption is $5,000 or 1% of the home’s value, whichever is greater. A homeowner has to apply for the exemption, and the county appraisal district will approve it. All Texas homeowners can apply for the exemption as long as they qualify.
What Are The Qualifications For A Homestead Exemption?
- The home must be your primary residence since January 1st of the year you’re applying for. With the new update, a new homeowner can apply for the homestead exemption when they close on their home. Homeowners over 65, veterans, or disabled have additional requirements.
- The home must be complete and livable. This qualification means new homes under construction do not qualify.
- Homeowners can only claim one property in Texas at a time.
- Only individual homeowners (not corporations or other entities) can receive the exemption.
- The property can be a house, condominium, or manufactured home. It can include up to 20 acres if the homeowner owns the land and uses it as a yard or for another residential purpose.
How To Apply For The Homestead Exemption
- Complete the application for residential homestead exemption in your county. Williamson County Online Homestead Exemption.
- Have a copy of your driver’s license or identification card from the Texas Department of Public Safety on hand to submit during the application. The address on the card or license must match the address you’re filing the homestead exemption for.
How Will The New Legislation Change The Real Estate Market?
The old rule made homeowners wait to apply until the following year after closing. Now, homeowners can apply for the exemption as soon as they close. Homebuyers can apply for the exemption on or after January 2nd, and a home seller who buys another home can also apply for a new residential homestead exemption. This means homebuyers can receive an exception mid-year if that’s when they buy. They no longer have to wait for the following year to apply and receive the exemption, which lowers how much you’ll pay in property taxes. Plus, the application will be good for next year!
The new legislation means homebuyers won’t have to rush to buy a home before January 1st, so they can apply for the exemption. This is huge news! There is little inventory available, so homes could stay on the market longer.
Call us to learn about the homestead exemption and how it applies to your home buying or selling journey! (512) 699-9714 or Tina@MallachandCompany.com.