Your Texas Homestead Exemption

It’s that time of year again!  Lower your property taxes by filing your Homestead exemption form if you have not done so already once before.  By filing this form, you can reduce the taxable amount of your property’s value and thus reduce the amount of taxes you will have to pay in future years.

Filing the Homestead Exemption Form is free! If you have not already begun receiving offers in the mail, you can expect to soon receive mail from companies saying they will file the Homestead form for a fee. THIS IS A SCAM.

  • You need to file this form only once while owning your home with your local county tax appraisal district
  • The deadline to file your application is April 30th

The state of Texas is unique in its application of homestead protection. Although this protection is very substantial, it also presents serious limits on the ability of a homeowner to mortgage his/her homestead.

The urban residential homestead consists of a lot or lots of 10 acres or less that is located within a city or town. There is no limit on the value of the land and its improvements entitled to homestead protection. Rather, what is defined as homestead is based solely on the size or acreage of the land involved.

The Texas homestead exemption began as protection for the wives and children of the early settlers in the event the man of the house was lured into a not-so-honest game of chance or decided he needed a few dollars more to continue a night out on the town. More seriously though, the wives and children of a deceased breadwinner were secure in their home(stead) and could not be removed because of some improper or manufactured claim of debt.

As a state constitutional protection, it has withstood the test of time and remained virtually unchanged as we have moved from the 19th century through most of the 20th century.

The practical protections of the homestead laws prevent any creditor (except for the mortgage holder, a taxing authority, or the holder of a note created for a home improvement loan) from forcing the sale of the homestead to satisfy non-payment of a debt. It is difficult to “abandon” the homestead protection to borrow against its equity. An owner who wants to maintain property ownership and be able to borrow against its equity would have to move out of the property and demonstrate it is now being used as rental/income- producing real estate and that he or she has established a new homestead elsewhere.

Home equity loans were not available in Texas until the constitution was amended, effective January 1998. Home equity loans in Texas involve numerous restrictions and requirements that may not exist for such loans made in other states. The amount of a home equity loan plus the balance of the first mortgage may not exceed 80% of the value of the property, thus leaving a 20% equity cushion at the time of the second lien.

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