Do you know about the homestead property tax exemption? It is a government-approved exemption that empowers you to lower the property taxes on your home (including new condos, new townhomes, and new single-family homes offered by Surge Homes) by lowering the taxable value. For example, if your home is valued at $250,000 and you receive a 20 percent exemption, you only pay taxes on $200,000. Since the average Houston resident pays about 2.5 percent of the home value in property taxes, according to HoustonProperties.com, you can see how the exemption benefits homeowners tremendously. (Read more on Houston’s rising home values.) The numbers are proof: with the 20 percent exemption on a $250,000 home, the homeowner goes from paying $6,250 in taxes to paying $5,000 in taxes. That’s $1,250 in savings on an existing or new home just by applying for an exemption.
Summary of Tax Breaks
According to the Harris County Appraisal District, there are three main types of homestead exemptions that affect Houston homeowners. First, homeowners who qualify for the exemption can receive a minimum exemption of $15,000 on the home’s value for school district taxes. This does not mean your home is worth less when you resell it—it simply means you pay less in taxes. Second, Harris County allows for 20 percent exemption, which means the home’s value is reduced by 20 percent. Third, there may be additional exemptions offered by the school district, county, city, or special district.
Who Is Eligible?
If you own a condominium, townhome, or single-family home (including any home for sale from Surge Homes, such as a new townhome, new condominium, or new single-family home) and use it as your main residence as of January 1, 2016, you are eligible for the homestead exemption. All you have to do to realize the tax savings is apply to the county tax assessor. This is a quick process that involves four steps:
- Fill out an application for the homestead property tax exemption (Form 50-114)
- Make a photocopy of your driver’s license that shows the property address.
- Make a copy of your car registration that shows the property address (a utility bill can be an acceptable substitute, as long as it shows the property address).
- File your application (with the photocopies mentioned above) between January 1, 2016 and by April 30, 2016. (Tip: Be sure to mail your application in on time—the envelope must be postmarked by April 30, 2016.)
Simply spend a few moments to fill out the application, gather the supporting documents, and head over to the post office. A little bit of homework today can yield big tax savings later.
