Texas property taxes can eat into a large portion of homeowners’ budgets. This is especially true for people on a fixed income, as many seniors are.
Fortunately, Texas law has built-in mechanisms, such as a property tax protest, to reduce (but not eliminate) the burden property taxes place on senior homeowners. Additionally, two recently passed state constitutional amendments will grant aged 65 and older residents further tax relief.
Homeowners in Texas aged 65 and older can tap into numerous property tax exemptions. For instance, every Texas homeowner who establishes a principal residence in the state can receive a $40,000 exemption from their local school district taxes. This homestead exemption is only for your primary home, not a vacation or income property, and was recently raised from $25,000 by an amendment to the Texas constitution.
The additional savings created by expanding the homestead exemption from $25,000 to $40,000 via the passage of Proposition 2 is modest. However, when combined with other exemptions, senior citizens should be taking advantage of all potential savings.
There is an additional annual $10,000 residence homestead exemption for a homeowner aged 65 or older that starts the year you reach the age of 65. This exemption also applies to school district taxes.
Further, each taxing district in the state can offer senior citizens additional exemptions beyond the standard residence homestead exemptions. This can come as a $3,000 additional exemption targeted for 65 or older. Or another optional exemption can apply to any homeowner, regardless of age, and cover up to 20% of your home’s taxable value.
Generally, you must apply for any homestead exemptions that you qualify for before receiving them. But the additional $10,000 for homeowners 65 and up will be automatically applied if your original homestead exemption application included your correct date of birth.
Another way Texas laws attempt to help senior homeowners is by providing a homestead tax ceiling on your school district taxes. If you qualify for a residence homestead exemption when you turn 65, your school district tax bill is capped at the amount you pay that year. As long as you own the home, your school district taxes will not exceed the amount you paid for the year you reached 65.
The only exception to this rule is if you make significant improvements to your home. Projects beyond routine care and maintenance, like adding a bedroom or garage, can be reflected in your home's taxable value, even after turning 65.
The school district tax “senior freeze” also carries over if you purchase and move to a new primary home. However, the transfer is for the percentage of tax paid under your current ceiling, not the exact amount. For instance, if the current senior freeze entitles you to pay only 50% of your school district taxes, you will also pay half of the taxes on the new home. If you buy a home with a greater taxable value, your property tax bills would increase.
Texas voters also recently passed a constitutional amendment, Proposition 1, which entitles senior citizens to further property tax relief. The measure will allow school district taxes for those subject to a senior freeze to decrease if the local district grants similar savings to other homeowners.
In 2019, Texas lawmakers approved a bill that granted significant savings to many homeowners on their local school district taxes. But the benefits did not extend to homes subject to the senior freeze, which was remedied by Prop 1.
One last way Texas allows senior citizens to minimize their property tax bills is by granting all homeowners the right to protest their property taxes. If you believe you have been wrongly denied an exemption you are entitled to as a senior citizen, filing a protest could result in lower bills. Likewise, if your local appraisal district is miscalculating your home’s appraised value or not correctly applying a senior freeze, you have the right to argue for the correct amount.
Even if you receive a cap on your school district taxes, your bills to other taxing units may be increasing rapidly. Ensuring your home is appropriately appraised and exempted is crucial and can only be enforced through a tax protest. The professional team at Watchtower Protest is here to assist you with any questions you may have.
Watchtower’s experienced property tax protest staff is available at no upfront cost to you. We only get paid if we can help lower your taxes. You can sign up for our services today at no risk and no upfront cost.
Property tax in Montgomery County - a property tax consultant can help you manage your tax obligations, exemptions, deductions, and how to challenge your assessment.