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I have clients asking all the time ,What Homestead exemptions are available to persons age 65 or older or disabled?
But to break it down this is what I know .
When you turn 65 you have to apply for that exemption right away, (no waiting period) . If you are buying a new home and you are already 65 then you need to apply for it as soon as you close .
In the state of Texas homeowners will receive a $25,000 Homestead Exemption from the state .Turning 65 you will qualify you for an additional $10,000 exemption. If the subject property has a tax value of $100,000 then you will only pay taxes on $65,000. You will receive a tax ceiling on the school Taxes. This means when you turn 65 your school taxes wont increase. The school tax ceiling will follow if the home is located within the applicable taxing unit . (city, county or junior college district). The ceiling on the new home is calculated the same as the school district. The Savings aren’t much at first but it gets better as the years go by and the taxes increase on everyone else but you!
Just in case this article was as clear as mud. Here are some FAQ from the Texas Comptroller of Public Accounts Website.
What homestead exemptions are available to persons age 65 or older or disabled?
There are several types of exemptions you may receive.
- School taxes: All residence homestead owners are allowed a $25,000 homestead exemption from their home’s value for school taxes.
- County taxes: If a county collects a special tax for farm-to-market roads or flood control, a residence homestead owner is allowed a $3,000 exemption for this tax. If the county grants an optional exemption for homeowners age 65 or older or disabled. The owners will receive only the local-option exemption.
- Age 65 or older and disabled exemptions: Individuals age 65 or older or disabled residence homestead owners qualify for a $10,000 homestead exemption for school taxes, in addition to the $25,000 exemption for all homeowners. If the owner qualifies for both the $10,000 exemption for age 65 or older homeowners and the $10,000 exemption for disabled homeowners, the owner must choose one or the other for school taxes. The owner cannot receive both exemptions.
- Optional percentage exemptions: Any taxing unit, including a city, county, school, or special district, may offer an exemption of up to 20 percent of a home’s value. But, no matter what the percentage is, the amount of an optional exemption cannot be less than $5,000. Each taxing unit decides if it will offer the exemption and at what percentage. This percentage exemption is added to any other home exemption for which an owner qualifies. The taxing unit must decide before July 1 of the tax year to offer this exemption.
- Optional age 65 or older or disabled exemptions: Any taxing unit may offer an additional exemption amount of at least $3,000 for taxpayers age 65 or older or disabled.
A helpful guide for understanding your property taxes: The Texas property tax system in layman’s language
What is a homestead tax ceiling?
It is a limit on the amount of taxes you must pay on your residence. If you qualify your home for an age 65 or older or disabled person homestead exemption for school taxes, the school taxes on that home cannot increase as long as you own and live in that home. The tax ceiling is the amount you pay in the year that you qualified for the age 65 or older or disabled person exemption. The school taxes on your home may go below the ceiling but not above the amount of the ceiling. However, if you improve the home (other than normal repairs or maintenance), the tax ceiling may go higher because of the new additions. For example, if you add on a garage or game room to the house after you have established a tax ceiling, the ceiling will be adjusted to a higher level to reflect the value of that addition.
Does the school tax ceiling transfer when a person who is age 65 or older or is disabled or is the surviving spouse (age 55 or older) of a person who was age 65 or older moves to another home?
A percentage of the school tax ceiling may be transferred. The ceiling on the new home would be calculated to give you the same percentage of tax paid as the ceiling on the original home. For example, if you currently have a tax ceiling of $100, but would pay $400, the percentage of tax paid is 25 percent. If you move to another home and the taxes on the new homestead would normally be $1,000 in the first year, the new tax ceiling would be $250, or 25 percent of $1,000.To transfer the school tax ceiling, you may request a certificate from the chief appraiser in the last appraisal district in which you received the tax ceiling. You present the transfer certificate to the chief appraiser in the district where the new home is located, when you apply for homestead exemptions on the new home.
If I am the surviving spouse of a disabled person, am I entitled to the school tax ceiling?
No, only surviving spouses (age 55 or older) of persons who were age 65 or older when they died may benefit from the tax ceiling.
Can the local option ceiling transfer if the owner who is age 65 or older or disabled moves to another home?
Yes, but the home must be located within the applicable taxing unit.( city, county or junior college district). The ceiling on the new home is calculated the same as the school district.