When we bought our first house in Texas, our realtor told us to make sure we applied for a Homestead exemption to help lower our tax burden.
In Texas, the exemption is $25,000 which means it lowers the assessed value of a home and taxes are determined at the lower assessed value. In other words, a home with an assessed value of $400,000 would be reduced to $375,000 and property taxes due would be determined on $375,000 instead of $400,000.
To further explain, let’s say your property tax bills is 2.5% of the assessed value of your home. On a $400,000 home, you could save $625 per year on your property tax bill and that’s a nice chunk of change.
Sadly, property tax exemptions have been around for quite some time, but until we moved to Texas, we never knew of their existence. This means for the 26+ years we owned homes previously, we were paying taxes on the full assessed value of the homes we owned.
We could have saved thousands of dollars on our property tax bill.
We can’t get that money back, but going forward, we can always make sure we are taking advantage of the exemptions available. It’s especially important in retirement and in some, if not all states, senior citizens can qualify for additional property tax exemptions.
Maybe we were the only ones that didn’t know about these exemptions. Although I find that hard to believe. But, if you’re a homeowner and aren’t taking advantage of property tax exemptions in your states, I would encourage you to do some research and see what’s available to you.