It’s time to start thinking about property taxes and property tax reduction options such as your homestead tax exemption. If you bought a home in the past year or have never filed for your homestead tax exemption, the time is approaching. If you live in your home on January 1st, 2013, you can apply for a homestead tax exemption. The home must be your primary residence (ie, you can’t claim multiple homestead tax exemptions for multiple properties), but as long as you live in the home on that date, you can file to receive this break on your property tax.
Here’s how it works.
The homestead tax exemption lowers the taxable value of your home. If you have a house that has a appraisal district tax valuation of $100,000 and you get a $15,000 exemption (the value on the homestead tax exemption was raised to $25,000 in 2015), the property tax you pay is based on a value of $85,000 ($100,000 minus $15,000), effectively lowering the tax owed to the country each year.
You must reside in the home on January 1st of the year you apply. This is why we remind clients at the end of the year, because they may have bought the home on January 2, 2012, but have not been eligible to apply until the following year (on January 1, 2013 in this case).
In order to claim the homestead tax exemption, you must fill out the Application for Residential Homestead Exemption (PDF file) and sent into your local appraisal district. Be sure to fill out the form completely and read the instructions carefully – there are several items that you are required to furnsh in addition to the completed form.
Be aware of scams.
If you’ve bought a home in the past year, you’ll probably get some mail from companies who will offer to file this paperwork for you and make sure you get your homestead tax exemption. Do not use these companies or send them any money. Filing your homestead tax exemption is free and these companies simply take your forms and drop them off at the appraisal district – something you can do just as easily for the cost that they will charge you. Many of the letters are rather deceiving in the way they’re written, making you think you need to pay their fee in order to receive the exemption. So please, be aware and contact your agent if you need help filing the form, they’ll be happy to do it (or you need a new agent).
PS I’ll remind everyone about this on January 1st as well – just wanted to be sure the information got out there.
image courtesy of chefranden