If you're a homeowner in the Lone Star State, it's essential to be familiar with the Texas Homestead Exemption and its associated 10% cap. These provisions can significantly impact your property taxes, providing financial relief and safeguarding your family's primary residence. In this blog post, we'll dive into the details of the Texas Homestead Exemption and the 10% cap, shedding light on how they work and how they can benefit you as a homeowner.
What is the Texas Homestead Exemption?
The Texas Homestead Exemption is a legal provision that offers significant tax benefits to homeowners. It is designed to protect the primary residence of Texas residents from excessive property taxes, making homeownership more affordable. To qualify for this exemption, your property must be your primary residence and considered your homestead. This means it's the place where you live and intend to continue living. Second homes and investment properties do not qualify for this exemption.
Key Benefits of the Homestead Exemption:
The 10% Cap Explained:
The 10% cap is a limitation on the increase in your homestead's appraised value. In Texas, property values can fluctuate, and this cap helps protect homeowners from drastic property tax hikes due to market fluctuations.
Here's how it works:
That protection does not start until after you have the Homestead Exemption in place for over a year. You have a gap yearbetween the purchase (and declaring homestead exemption) and having the 10% limitation on increases in appraised value
Example: