Homestead, Sweet Homestead

Let’s talk about homestead exemptions for property taxes here in Texas.

Having a homestead exemption in place can save you thousands of dollars on your taxes each year. In the past, once a homestead exemption was in place, it remained until it was manually removed — usually because the home was sold or the exemption was transferred to a new property. This led to abuses of the system, such as with folks moving out of state and keeping an exemption on a home they no longer kept as their primary homestead. In 2023, the Legislature passed a new law, The Homestead Exemption Audit, to reduce the underpayment of taxes through falsely claimed homestead exemptions.

Required to Verify

Now, by state law, county appraisal districts are required to verify each homestead exemption every five years to make sure the property still qualifies. But, the law does not outline a specific method that the counties have to use. Since this is new, county appraisal districts are taking different approaches. DCAD (Dallas County Appraisal District) mailed out letters at the end of December requiring homeowners to re-apply for their homestead exemption. Those that do not will have the exemption removed and will have to reapply and possibly pay the higher tax rate and then receive a refund later.

Back Home in Central Texas…

In Central Texas, TCAD (Travis County Apprisal District) and WCAD (Williamson County Apprisal District) have not made any announcement about how they will be approaching the verification process. HCAD (Hayes County Apprisal District) has announced it will be sending out letters to some, but not all, property owners requiring a reply with a copy of a driver’s license and signature attesting the homestead exemption is accurate.

Don’t Pay a Third-Party Guy

As a reminder, there are no costs or fees in Texas to apply or verify homestead exemptions. All appraisal districts have the exemptions for each property listed online, as well the appropriate forms you need to download to both file for the initial exemption and for any verification. Some companies send misleading offers and offer to charge you to file these forms. There is no reason to pay them to send in these forms on your behalf when you can simply mail the signed form to the county office yourself.

If you have any questions about filing or maintaining your homestead exemption or about any other exemptions, please feel free to reach out to me directly at Adam.Stephens@capstarlending.com.