Previously, on the blog, we covered three options for property tax assistance in Texas. In that article, we noted various ways to ease the burden of having a cumbersome tax bill on your hands. One of the alternatives mentioned was an exemption. The most common exemptions are intended to assist disabled citizens, veterans, seniors and surviving spouses of disabled veterans.
In this article, we’re going to take a closer look at:
- What an exemption actually is.
- How property tax exemptions in Texas work.
- Which homeowners may qualify for them
- Considerations for those who are not eligible for exemptions.
So, keep reading to get a little more insight into Texas property tax exemptions.
What is an Exemption?
Let’s start with the basics — defining what a property tax exemption actually is. In Texas, you might qualify for a reduction in the taxable appraised value of your property which in turn reduces the amount of your tax bill. These deductions are considered exemptions, and they’re available in two types — partial and total. Partial exemptions knock off either a percentage or set dollar amount from your property’s taxation value (the assessed value of your home). A total, or absolute, exemption means a property can be excluded from taxation.
Keep in mind that some exemptions are mandated by the State are required. Other exemptions are managed by local taxing authorities and are offered at their discretion.
Property Tax Exemption Types
The Texas State Comptroller lists six notable property tax exemptions in Texas that affect privately-owned properties:
- Age 65 or older exemption
- Disability exemption
- Charitable organization or business exemption
- Residential homestead exemption
- Solar and wind-powered energy device exemption
- Veteran’s exemption
Following are explanations for each one.
Texas Property Tax Exemptions For Seniors
These are mandatory, partial property tax exemptions for homeowners who are 65 or older, or who are disabled. According to the State Comptroller, Tax Code Section 11.13(c) requires school districts to offer an additional $10,000 residence homestead exemption and Tax Code Section 11.13(d) allows any taxing unit the option to decide locally to offer a separate residence homestead exemption. This exemption can’t be less than $3,000.
To qualify for property tax exemptions for senior citizens in Texas, the owner has to meet the age requirements and live in the house. In the event that the homeowner passes away, the surviving spouse may still be eligible for the local exemption if they’re 55 or older and they own and live in the home.
Property Tax Exemptions For the Disabled
In order for a disabled individual to qualify for an exemption, they must meet the requirements for receiving disability insurance under the Federal Old-Age, Survivors and Disability Insurance Act. You don’t necessarily have to be disabled by the beginning of the tax year, but you may still qualify should you become disabled at any point in the year.
While these exemptions cover two different demographics, you can’t qualify for both at the same time if you happen to check those two boxes. This means if you’re 65 or older and disabled, you’re not automatically eligible for both exemptions. You’ll have to pick either the age exemption or disability exemption.
Charitable Organizations or Businesses Exemption
If you own a charitable organization or business, you might be entitled to a property tax exemptions under Texas law. According to Texas Tax Code Section 11.18, property owned by a qualified charitable organization is exempt, however, the organization must meet specific requirements as to how it’s organized, what it does and how the property is used.
The tax code further states that “The organization may not allow anyone to realize private gain from the organization’s activities. In some cases, particularly involving medical care facilities, children’s homes and nursing homes, questions may involve whether the institution serves people who cannot pay for services as well as those who can.”
Therefore, buildings, land on which buildings are located and personal property owned by a charitable organization are all eligible for exemption under strict guidelines that the property is used by the charitable organization or equally qualified groups. This exemption also covers partially completed improvements and physical preparation.
Solar and Wind-Powered Energy Device Exemption
If you have a solar or wind-powered energy device installed on your property, you may qualify for an exemption. To receive a solar or wind-powered energy devices exemption, you’ll need to file an application with the chief appraiser of the appraisal district where your property is located. You can find the form to do so on the Comptroller’s website. The form requires the information necessary for the chief appraiser to determine whether the property meets the exemption requirements.
In order to qualify for a solar or wind-powered energy device exemption in any given year, you must file the application by April 30. If you fail to do so, you will not get the exemption for the current year.
Texas Property Tax Exemptions For Veterans
Veterans may qualify for partial or total exemptions depending on the circumstances. Through Tax Code Section 11.22, disabled veterans can get partial exemptions for any property they own. For disabled veterans who are deceased, their surviving spouses or children may receive the partial exemption.
Tax Code Section 11.132 provides a partial exemption for residence homesteads that were donated to disabled veterans by charitable organizations. This also covers surviving spouses who have not remarried. The amount of exemption is determined according to the percentage of service-connected disability.
Through Tax Code Section 11.131, a disabled veteran who receives 100% disability compensation due to a service-connected disability and a rating of 100% disabled, or of individual unemployability, is entitled to a total property tax exemption. This exemption also covers surviving spouses who were married to disabled veterans who qualified or would have qualified if it had been in effect at their time of death. Eligibility also depends on if the surviving spouse has not remarried, the property was the residence of the spouse when the veteran died, and if the spouse is currently living in the house.
Under Tax Code Section 11.133, the surviving spouse of a member of the U.S. armed services who was killed in action can get a total property tax exemption as long as they have not remarried since the member of the armed services died.
Residence Homestead Exemption
A Homestead exemption removes part of your home’s value during the valuation process to help lower your overall tax bill. To qualify for this exemption, your home must be a place of residence and cannot be owned by a corporation or business entity. This home must be your primary residence by January 1 of the tax year.
Tax Code Section 11.13(b) requires school districts to offer a $25,000 exemption on residence homesteads and Tax Code Section 11.13(n) allows any taxing unit the option to decide locally to offer a separate residence homestead exemption of up to 20 percent of a property’s appraised value. The local option exemption cannot be less than $5,000.
There are no major qualifications for the homestead exemption other than having an ownership interest in the property and using the property as your primary residence. However, you can’t claim an exemption on another residence homestead in or outside of the state.
If Texas Property Tax Exemptions Won’t Work For You, Find Relief at Tax Ease
If an exemption is not possible for you, and you need assistance with paying your tax bill, Tax Ease can help with a customized tax loan that’s built around your needs. The application process is simple and we can get you approved within 24 hours. No application fees or initial costs. No inconvenient office hours or paperwork sessions. No overwhelming delinquent property tax penalties. Just outstanding customer service and property tax help that works with your life. If you have questions or want us to walk you through the process, contact us today.