What is the Homestead Exemption?
By obtaining a homestead exemption you get legal protection from some creditors. It protects you from having a creditor force the sale of your home to pay a debt. The exemption also reduces your tax bill by lowering your homes taxable worth.
Do you own your own home?
If you do, you can file a Homestead Exemption on your primary residence. The home’s title must be in your name, not a corporation or other business entity’s name on the title. The home must have been your primary residence since January 1 of the tax year. If you are 65 or older, the January 1 ownership and residency rules do not apply. The homestead can be a separate structure, condominium, or manufactured home on owned or leased land, as long as the owner lives in it. The homestead can include up to 20 acres, if the land is owned and used as yard, farming, or some other residential use.
How much is the exemption?
The general exemption is $15,000. Which means if your home is appraised at $100,000, with the $15,000 homestead exemption you would be taxed at $85,000. The exemptions for individuals over 65 years of age, disabled homeowners, or a disabled veteran can be even more.
How do you file for a Homestead Exemption?
Filing a homestead exemption is as simple as filling out the proper form and submitting it to your county clerk’s office.
BEWARE of companies offering to file this for you for a charge. Many companies will bombard you with ads after you buy a house offering to file a homestead exemption for you for a fee. This is unneeded. You can do this yourself and avoid the $15-$50 cost. In Texas you can find the forms here: http://www.txcountydata.com/forms.asp Or call your local county clerks office for more information.
A common misrepresentation by agencies who want to help you file the forms is that a recorded declaration of homestead protects against enforcement measures by all creditors. In fact, filing a homestead declaration does not protect against creditors whose claims are secured by a prior mortgage or deed of trust on the property, or against a business that has a mechanic’s lien on the property as a result of providing services or improvements. It also does not protect you against existing mortgages, long-term care claims for Medicaid payments by the Division of Medical Assistance, or existing claims or lawsuits.
A homeowner who is in financial trouble, or one who expects to encounter financial trouble, should consult an attorney for advice on how to protect their home.
This information is for property owners in the State of Texas. Many other states also offer a homestead exemption, or a homestead declaration which can protect one of your most valuable and important assets, your home. Call you local county clerk, or county registrar’s office for information. Even if you think you already have a homestead exemption on file, I encourage you to double check and make sure. The money you can save and peace of mind with make it worth your time. Many Texas counties have websites where this information can be found.
Here are several websites that may be helpful:
http://cad.nolallen.com/
http://www.txcountydata.com/
http://www.window.state.tx.us/taxinfo/proptax/
http://appraisaldistrict.net/county.asp
