Back when the West was won (and young), the fledgling US government granted homesteading pioneers land ownership at little to no cost as long as they remained on the property for a certain number of years. 

Flash forward to today, and while land is no longer available for homesteading, the State of Texas does give new homeowners a bit of a tax break in the form of a Homestead Exemption.  So, it works like this:  If you have a house that is currently valued at $100,000 and you qualify for a $20,000 exemption, your taxes are calculated on the $80,000 value.  The exemption can add up to some pretty substantial tax savings.

New homeowners can apply for their homestead exemption between January 1 and April 30 of the year following the purchase of their home.  It’s important to make sure that you file within these dates since the taxing districts do not accept early applications.  Once your exemption is approved, you will receive an annual postcard notifying you that the exemption is still in place.  Watch your mail for that little postcard, because it means your home is still eligible.  A few years ago, my postcard did not arrive.  I really didn’t think much of it until I got our tax bill.  YIKES!  I called the County and was told that since the post card was returned as “undeliverable” by the US Postal Service, they automatically presume that the owners have moved and no longer qualify for the exemption.  Um, we had been living in our home for over a dozen years and certainly had not moved.  After filling out a few forms, I was able to get the exemption restored. 

I also make sure to tell my new buyers not to fall for the mailers they will get shortly after they close on their new homes.  These companies offer to sell you a copy of your own deed or offer to complete your exemption application for a fee.  You should receive a copy of your deed as part of your closing – and the exemption application is pretty easy to complete.  You don’t need to hire anyone to do it for you.  If you have questions on the application or how it works, please let me know.  You can also CLICK HERE for Texas first-time property owner information provided by Harris County.