It’s that time of year. Time flies as holidays approach then vanish into your rear view mirror. Is it really possible that 2013 is nearly over? It can’t be! But of course it is. Whether it’s due to the hustle and bustle of the holidays, the social gatherings or lots of travel, the next thing we know it’s 2014 and we start all over again. But if you’re buying a house here in the Austin area and there’s a bit of leeway when you’re allowed to close, make sure you close by year end so you can have a piece of special paperwork in your hands that can save you thousands. Your homestead exemption.
The Texas homestead exemption provides property owners a break on property taxes as long as the property is the owner’s primary residence. How so? We all know that Texas doesn’t have a personal income tax but we do lay claim to some fairly sizable property tax rates. To offset that, property owners can deduct $15,000 from the assessed value of your home as long as you have applied for the exemption and occupy the property on or before January 1, 2014. Waiting beyond that magical date means waiting another year to reduce your property tax bite.
There is no fee to apply for the property tax exemption and you can request download the form from the Travis County Appraisal District website or you can ask your loan officer or real estate agent for a copy of the form.
Say that your primary residence is appraised by the appraisal district at $200,000. That’s the tax basis for your property tax obligation. But with the homestead exemption, your property taxes apply to $200,000 – $15,000 = $185,000. Your lower property taxes are the result of the reduced property tax basis, in this instance, on $185,000 of value, not $200,000.
There is no fee to apply for the property tax exemption and you can request download the form from the Travis County Appraisal District website or you can ask your loan officer or real estate agent for a copy of the form. But don’t wait. If you have the option, own and occupy your home on or before January 1 to take advantage of this special tax break.