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 ?
If a homeowner purchased home in 2021 and it is their their primary residence are the eligible to file for homestead exemption by April 30, 2022 since the law didn’t go into effect until 1/1/2022?
I too have a question about 2021 home purchases. If you bought mid year 2021, and applied for the homestead (previous owners also had it on), would this new law work for the non-capped increase in 2022. Or does it only work from homes now forward?
Just wondering if this screws buyers in 2021 or if they benefit from this as well.
I would like to know this answer as well. We purchased in December 2021 from owners with a homestead on the property. Due to the change in law not going into effect until Jan 2022, we could not claim our own homestead in December 2021. Now we have new property values in 2022 out and it appears the cap may not be applied since we did not have a homestead in 2021? Hoping this is not a gap in the law for caps in which new homeowners get screwed.
I would like to get an answer on this questions as well since I too am a mid 2021 home buyer and was told that one need to live in the home for an entire year to be eligible for homestead.
I would like to get the answer too
Can I get the over 65 exemption and homestead exemption on my home I live in but deeded it to my son many years ago. He bought his own home and will now have an exemption on that home. If he adds my name on the deed to my home and reserves a POD, can I get the whole homestead exemptions or only on half the undivided interest I will have on my home after adding my name on the deed?
Waller County said they would not honor the new law.
Cherokee County is not allowing it either. Will someone please give a legal response to this?
Is there any relief for people that bought in January 2021 and are have taxes double yo to not being eligible for the tax cap till January 2023. Our appraisal value was doubled this year . We got the 25k homestead deduction but not the 10% homestead cap which doubled the amount of taxes we owe
Following… We appear to be in the same situation as we purchased in December 2021…
We have a similar issue. Our taxes have gone 80% this year because we closed Jan 15 2021 instead of Dec 31, 2020.
Looks like 2021 buyers who closed after Jan 1st 2021 are all screwed. Unfortunately, 2022 taxes will be assessed on the full market value. And for 2023, since the values have gone up further and 10% homestead cap would apply, there is going to be a 10% increase once again.
This is the first year in our new home. Our tax appraisal is $100,000 more than what we paid to have the home built. The land also went up $100,000. I don’t think I can fight the rise in land cost because we’ve owned the land for over a year but the house is new. Do you think I have a valid argument for the appraisal district when I ask them to reduce the house value to the cost of what I paid for the house?
The home must be purchased on or after Jan. 1, 2022. Source: https://www.kvue.com/article/news/investigations/defenders/change-to-homestead-exemption-law-causing-confusion-for-some-property-owners/269-ea311026-5bf0-41bf-bac7-f12bbf312d9f
Our local MLS office SOLD sales price data to the appraisal district!!!!!!! How is this legal?
I would like to know the answer to this as well – does cap loss apply only after one year of approved homestead exemption ? If so, mid 2021 buyers are screwed with the market value for 2022.
My spouse has passed as of July 2021. My spouse bought the house before we got married in June 2019. Homestead exemption was never filed by my spouse. I have filed homestead exemption heirship for 2 years back since Texas is a community state and I became half owner the day we married. I have given all documents showing I have lived in the house and paid half of the mortgage since 2019. The appraisal district is denying me the right saying it is because I am not on the deed as of January 1st, 2021. The probate shows I… Read more »
I purchased house in March 2021. In 2022 my property tax had gone up by 60%. WCAD says my homestead protection does not come in play until 2023, as 2022 is considered my first year. I got a response that says SB8 does not apply to properties bought before Jan 01, 2022.