Here are property tax topics for veterans and older or disabled homeowners
Property owners in Texas are subject to property taxes, but people over age 65, disabled, or veterans, are eligible for tax reductions. First, this article will cover the basics, to show how the special rules for these populations fit into the bigger picture.
The Texas Constitution guarantees rights and protections to homeowners related to homestead property, and it also lays the foundation for local taxation. Taxes are collected and paid to school districts, junior colleges, cities and counties for services such as schools, hospitals, fire departments, and roads. For example, residents of Harris County will see the City of Houston, Harris County Flood Control, Port of Houston Authority, Harris County Hospital District, their local school district, and other local taxing units on their tax bill.
Property owners who own and occupy a home as their principal residence and who cannot claim another property in Texas or another state generally qualify for residence homestead exemptions. School districts must offer a $25,000 exemption from ad valorem taxes. For example, if a home is appraised at $200,000 and the owner qualifies for a $25,000 exemption, she pays taxes based on a $175,000 value. Additional exemptions—even up to 20% of the appraised value—are offered by other taxing units.
Texas also caps the annual increase to the appraised value of a residence homestead at no more than 10% of the appraised value for the previous year, unless there were improvements. For example, if the appraised value of a home in one year is $200,000, the appraised value the next year would be capped at $220,000.
Lesser known points of interest include the following: Homestead property that is in a homeowner’s trust can qualify for the exemptions if the trust includes certain language. A person who owns only a life estate in their home is eligible for the homestead exemption if the other requirements are met. Also, if a homeowner temporarily moves to a nursing home she can still receive an exemption as long she does not establish another principal residence.
Homeowners who are over 65 or disabled are eligible for additional exemptions on homestead property. School districts must offer a $10,000 exemption, and other taxing units may offer additional exemptions. Individuals who turn 65 or become disabled during a tax year immediately qualify for those exemptions, as if the person qualified on January 1 of the tax year. If a married homeowner over 65 dies, the surviving spouse can continue to receive the exemptions if the surviving spouse is age 55 or older at the time of death and lives in and owns the home. To receive the exemption due to disability, the person must meet the definition of disabled under the Social Security Administration rules.
Homeowners who are disabled or age 65 or over also benefit from a tax “freeze,” where the total tax cannot be raised after the first year the person qualified for the exemption. A surviving spouse over age 55 is eligible to continue receiving this advantage.
Disabled veterans, surviving spouses, and children of deceased disabled veterans are eligible to receive partial or total exemptions from property tax on residence homesteads. The exemption is determined according to the percentage of service-connected disability. For example, a veteran with a disability rating between 50% and less than 70% disabled from the VA receives a $10,000 exemption. Veterans who receive 100% disability compensation due to a service-connected disability and a rating of 100% disabled from the VA are entitled to an exemption of the total value of the veteran’s residence homestead.
You may visit our website at www.wrightabshire.com. Nothing contained in this publication should be considered as the rendering of legal advice to any person’s specific case but should be considered general information.