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What is a Property Tax Exemption?

Nobody likes paying a dime extra in taxes. Yet when it comes to property tax bills, some homeowners pay too much simply because they aren’t aware they qualify for an exemption.

In most cases, you have to find and apply for property tax exemptions offered by states, counties, or local jurisdictions. The agency that collects your property tax can tell you where to find information about the exemptions it offers. Does this seem like too much work?! Don’t worry Kimbrough Partners can help you with this!

Here are five of the most common types of  property tax exemptions :

1. Resident Homestead 

Homestead exemptions keep you from paying tax on a certain portion of your home value. This exemption is typically decided by other criteria such as age or income level. Each locality has its own rules and deadlines for applying. Some even require you to re-apply each year. Tax Code Section 11.13(b)

2. Seniors and the Disabled 

In the state of Texas generous property tax exemptions are offered to  both older homeowners and the disabled. There are age, income, and residency restrictions. Read the fine print. A homestead exemption aimed at the elderly may only defer property taxes until the home is sold. And don’t assume exemptions for seniors kick in at 65. Tax Code Section 11.13(c)

3. Military Veterans

Service to your country abroad may grant you property tax relief at home. In Texas, a veteran with a disability rating of: 70- 100 percent may receive a $12,000 property tax exemption. Veterans with a full 100% disability rating are fully exempt from property taxes. 50- 69 percent may receive a $10,000 property tax exemption. Tax Code Section 11.22, 11.132,  11.131, and 11.133) 

4. Renovations

If you like to renovate, check for a property tax break like these:

• In Bismarck, N.D., fixing up a residential property that’s more than 25 years old can earn you a five-year exemption from paying property taxes on the value the remodeling added to your home.
• In Pierce County, Wash., you can get a three-year exemption for home improvements up to a certain percentage of your assessed value.

Be sure to check with your tax assessor’s office before tearing anything down; applications may need to be approved before work begins.

5. Energy Incentives

Installing renewable energy systems in your house could pay off on your property tax bill as well as your energy bill. Some states exclude the value of certain green improvements from a home’s real estate assessment. The Texas property tax code allows an exemption of the amount of 100% of the appraised property value increase arising from the installation or construction of a solar or wind-powered energy device that is primarily for the production and distribution of thermal, mechanical, or electrical energy for on-site use and devices used to store that energy.

Eligible upgrades may include the installation of solar panels or geothermal heat pumps.

Look for information on local property tax breaks for renewable energy systems on the  Database of State Incentives for Renewable & Efficiency . Tax Code Section 11.27. 

Other Exemptions

A visit to your local tax assessor’s office may turn up other less common  property tax exemptions .

• Historical Site – HCAD,  FBCAD ,  GCAD
• Widow/Widower (Veteran) –  HCAD,  FBCAD 
• Surviving Spouse of First Responder – Statewide