What is a homestead exemption and do I need to file it?
Yes, you want the homestead advantage in Texas! Since 1839 Homestead exemption has been a privilege in Texas and every homeowner should consider taking advantage of it. The homestead provision provides for 3 categories of protection: the homestead exemption from taxation, homestead protection from creditors, and homestead right of occupancy.
The most common reference is the homestead exemption that saves the homeowner money on their ad valorem taxes. In this instance, a portion of the appraised value of the residence is excluded from the taxable value. This is a home plus up to 20 acres that the structure sits on. It can be a mobile home and can even be sitting on leased land, as long as the occupant owns the mobile home.
If you qualify for a homestead exemption, you can file an application for the exception with the appraisal district in the county where the property is located. A person may only have one homestead at a time. The homestead ends when the home is sold.
An Urban homestead includes up to 10 acres used as a home . A Rural homestead includes up to 100 acres. You cannot have both a rural and urban homestead – it has to be one or the other. A homestead is considered urban if it is:
– within the city limits or extraterritorial jurisdiction of a municipality or part of a platted subdivision
and served by:
– police protection, paid or volunteer fire protection, and at least 3 of the following services provided by the municipality (electric, natural gas, power, sewer, storm sewer, and water). Otherwise it’s rural.
Once a homestead is established, it remains a rural homestead, even if the surrounding are becomes urban.
Most homeowners are aware of the homestead law that exempts them from certain taxes, but the law provides two other key provisions: homestead protection from creditors and the right of occupancy.
Nothing in this publication should be construed as legal advice. For specific advice, consult an attorney.