This post has been revised to clarify several key points.
Before a recent change in the Texas Tax Code, some homebuyers were not eligible for a property-tax homestead exemption until January 1 of the year following their home purchase. This caused those homebuyers to lose out on any benefit of the homestead exemption for up to a year after purchase. For example, if on January 2, 2020, a person purchased a home that did not have an existing homestead exemption, that person was not eligible to benefit from a homestead exemption until 2021.
Who Benefits from the Change in the Law?
A change in the law that became effective January 1, 2022, allows all homebuyers to be eligible to receive the homestead exemption beginning on the date they obtain ownership. SB 8 by Sen. Bettencourt, which Texas REALTORS® supported, allows homebuyers who purchase a property that does not already have a homestead exemption to apply for the exemption immediately. This includes homebuyers of new construction, properties that were owned by investors, and properties for which the seller had removed the homestead exemption.
What is the Deadline to Apply for an Exemption?
A new homeowner must apply for the exemption for the applicable portion of the tax year before the first anniversary of the date the person acquired the property. There is no longer a requirement of applying by April 30 as there was previously. (The April 30 deadline still applies for other types of exemptions.)
If the new owner qualifies to receive the exemption prior to January 1 of the following year, the taxing units will recalculate the amount of tax due and correct the tax roll. If the tax has already been paid, the excess amount will be refunded. The previous requirements for eligibility to receive the homestead exemption still apply.
How Does the New Law Affect the Process for Applying for a Homestead Exemption?
Though the deadline for an application to be submitted has changed, the process for obtaining the exemption should not change. Homebuyers should check with their central appraisal district for detailed instructions.
So if the home purchased already has an existing homestead exemption can it be removed from the previous owner to take with them to their new home or does that stay in place until December 31 of the year purchase?
Good question
I believe the answer is yes. One can only claim a homestead exemption on the one property they live in… their actual home. When the new buyer shows the closing document as proof of purchase from the previous owner, the homestead exemption is given to that new owner.
What happens when a person sells his homesteaded home in June , purchases another home and homesteads it? Does the homesteaded tax value on previous home get rolled back to non homestead rate for January to June?
Regarding the Deadline of the new rule, I would think that if you bought your property in the beginning of the tax year, and most counties require you to get your Exemption Requests in by April 30 for value purposes, etc., you would still want to encourage people to do that so they can get their Homestead Exemption in place so their taxes will hopefully be lower when the tax bills come out in Oct/Nov. of each year.
This article is in the REALTOR section of the site. Is there a consumer/buyer-friendly version somewhere?
No, sorry Zeke. Realtors only.
What if it’s a new build. The owner owns the home via a one time close construction loan but the home isn’t finished yet and they aren’t residing in it yet. However, they do own it.
So if someone bought a house on, say, January 2, 2021, at the time they would have been eligible to apply for homestead exemption in 2022, and would have been required to file it by April 30. But now, due to the change in the law, they MUST file by the first anniversary of the date of their purchase, i.e., January 2, 2022 which, having now passed without filing, means they are ineligible for an exemption until 2023? Or does someone who purchased in the first months of the year still have until April 30 to apply? If that is… Read more »
Is this applicable for home buyers in 2021? Would they be able to claim homestead exemption for part of 2021 ?