Each year, in September, the governing bodies of the local taxing units decide what services they will provide and how much money they will need. They adopt the unit budget and set the tax rate for the year that will provide the needed revenue.
Taxing units also have the authority to allow partial exemptions. These exemptions reduce the taxable value of qualifying properties. Homestead, Over Sixty-Five, and Disability exemptions are partial exemptions which can be granted on your principal place of residence. They can only be claimed on one piece of property in the state of Texas.
Taxes are calculated by subtracting the value of any exemptions, and the cap value if applicable, from the homestead value of the property and then adding any productivity or non-qualifying value. This result, the taxable value, is then multiplied by the tax rate per $100. The answer is then divided by 100 to arrive at the tax amount for the taxing unit. This process is repeated for each taxing unit.
Exemptions reduce the taxable value of your property. This lowers your tax amount. Some of these exemptions are:
- Residence Homestead Exemption – available for all homeowners on their residence as long as they lived there on January 1st of the tax year.
- Disabled Person Exemption – available in addition to the homestead exemption to those who qualify according to specific guidelines.
- Disabled Veteran Exemption – available to the Veteran or their surviving spouse. This can be taken in addition to the homestead exemption and is set according to a disability rating. This exemption can be taken on any one property in Texas; it is not limited to the homestead property.
- Age 65 or Older Exemption – available to those homeowners age 65 or older. This can be taken in addition to homestead exemption.
- Homeowners over the age of 65 or who received the disabled person’s exemption may also arrange for a Tax Deferral on their homestead property. You may choose to defer the collection of taxes if you own and occupy your residence and taxes are delinquent; however, a tax lien remains on the property and interest of 5% a year continues to accrue.
The chief appraiser is responsible for administering exemption applications. A property owner or the owner’s authorized agent must file any necessary exemption form before May 1 of the tax year.
State law automatically places a tax lien on property January 1 of each year to ensure that the taxes are paid. However, the lien is not enforced so long as the taxes are paid before the due date. Any applicable penalties and interest are applied if unpaid after the due date.