July 1st, 2011 | Posted in Buyer FAQs | Comments Off [pinit]

San Antonio Homestead Exemptions

Texas has a unique and interesting view of HOME, and so the “Founding Fathers” created the Texas Homestead Laws, and subsequently the Homestead Exemptions. Texas achieved its first homestead exemption by statue on January 26, 1839. The initial reasoning behind the law was as a protection for the wives  and children of the early settlers in the event the man of the house was lured into a not-so-honest game of chance or decided he needed a few dollars more to continue a night out on the town.  The law meant that if the “breadwinner” died, the wives and children of the deceased were secure in their home (stead0 and couldn’t be moved out by some “manufactured” claim.

This was a fundamentally important part of the Texas Value system, and realizing that any mere statue is subject to the whim of the legislature, the Texas homestead exemption was incorporated in the State Constitution in 1845. This put the Texas homestead exemption beyond the reach of the state legislators. As a state constitutional protection, it has withstood the test of time and remained virtually unchanged as we have moved from the 19th century through most of the 20th century.

Changes to the law in the late 1990′s made it possible for Texas Homeowner’s to have an Equity Line of Credit on the home. The amount of the equity loan plus the total of all other debt against the homestead property cannot exceed 80% of the market value of the property on the date the loan is closed.  Additionally, it can not be an Equity LINE – it must be a fully amortizing loan.

Not all homes qualify for homestead exemptions, because only the homeowner’s principal residence qualifies. To qualify, the home’s owner must be an individual (for example not a corporation or other business entity), and use the home as his or her principal residence on January 1 of the tax year.

The residential homestead can be either urban or rural.  An urban homestead consists of a tract of land not exceeding 10 acres.  The land must be in one tract and is usually located in a community, city or town.

The rural homestead consists of two hundred (200) acres or less for a family, or one hundred (100) acres or less for a single adult. In both instances, the value of the land and the improvements is irrelevant.

Exemption provided

Under the Texas homestead exemption, the residence is protected from the forced sale by all creditors of the homeowner, except for these reasons… The lender who loans money to you for the purchase or refinance of the homestead, the tax man, A contractor who worked and/or provided materials for the homestead, a lender who loans money for a home equity loan.

When To File

When you purchase a home in Texas and it is your primary place of residence, you may file for a Homestead Exemption. Applications for exemptions must be made between January 1 and April 30.  You have to apply for the Exemption – you can use the PDF form here.

San Antonio Homestead Exemption Form

Savings Example

A homestead exemption lowers the property taxes on your home by lowering its taxable value. If your home is valued at $100,000 and you receive a $15,000 homestead exemption, your home will be taxed as if it were worth $85,000.  If you are disabled—or if you are at least 65 years of age—you may be entitled to an additional school tax exemption on your home. Homeowners should contact their local county and city entities for other possible exemptions

If you are interested in buying or selling a home in San Antonio and have questions about your property taxes in Bexar County, please call The Real Estate Muses at 210-332-0310, or connect with us on Facebook!  We’d love to get to know you better and answer any of your questions!

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