Starting Jan. 1, 2022, Texas homeowners will now be able to file for and receive their homestead exemptions in the year that they purchase a home, instead of having to wait until the following year. This law will most significantly impact new homeowners, who will be able to lower their property’s taxable value — therefore, saving on property taxes — in the first year they own their home.
The tax break will provide a little relief in a state with some of the highest property tax rates in the country. With the new law, Texans will get a proportionally-allocated exemption from the time they purchase the property. So if a buyer purchases a home in May, they would receive the homestead exemption for May through the end of the year on that year’s tax bill. Changes to Texas homestead exemptions were part of S.B. 8, which was passed by the Texas legislature and signed by the Governor in September with an effective date of Jan. 1, 2022.
What reduces property taxes for Texas homeowners? Homestead exemptions from counties, schools, municipalities, and special districts. All Texas homeowners receive a $25,000 exemption on the value of their home from school taxes — which may jump to $40,000 if voters approve the change in May before being applied to 2022 taxable value. County exemptions vary according to the county. Cities may also offer their own homestead exemption. Typically, homeowners can expect to save 10-20% on property taxes through homestead exemptions.