Texas Homestead Exemptions
You may have heard the news – Texas has made some changes regarding when you can file for your homestead exemption. Historically, no matter when you closed on a property, you had to wait until the following January 1 to file for your exemption. You also had to have lived in the property on January 1 of that year. This always led to a rush to close properties before December 31 so that the new owner was eligible to file.
As of January 1, 2022, if the property does not already have a homestead exemption tied to it (it it’s a rental property, second home, etc…), the buyer can apply for and, if granted, receive the exemption mid-year. They no longer have to wait until the following January.
If the property already has a homestead, the situation remains the same as before. The homestead exemption has already stayed for the remainder of the year and will continue to do so. The buyer will then still need to file for their own homestead exemption after the first of the new year.
How will this affect closing? If the property has an existing exemption, nothing will change. If there is no current exemption, the title company will have no way of knowing that a future exemption will be filed for, if it will be granted, or what the reduction will be, so the buyer will likely get a larger credit from the seller (because it will be based on the full tax amount) and the seller can seek a reconciliation of the amount later per paragraph 13 of the TREC purchase agreement.
So, if you purchased a home in 2021 that meets the requirements for a homestead exemption, it is time to file now!
More information and forms to file your Texas homestead exemption can be found on the website of your county’s appraisal district. Travis County Appraisal District, Williamson County Appraisal District, Hays Central Appraisal District.