In Texas, “homestead” is a legal status for real property created by the constitution. A homestead generally consists of the home, fixtures and land that a person occupies as a residence and it can be either separate or community property. There is no requirement to file anything of record to establish a homestead in Texas. However, a homeowner will need to file an Application for Residential Texas Homestead Exemption to take advantage a reduction in property taxes.

BACKGROUND


One of the many reasons that I love being a Texan is because of the strong property owners rights that we have in our great state. One of these protections is the Texas Homestead Law which began in 1839. So many of the original settlers in Texas were pursued by creditors and this law protected their property by making it exempt from certain creditors claims. The homestead law was also a protection for the settlers’s wives in the event the man of the house was stupid enough to gamble away his property or get killed. The families of a deceased breadwinner were secure in their home(stead) and could not be removed because of some improper or manufactured claim of debt or be forced to sell because of non-payment of a debt other than taxes or mortgage on the property.

In Texas law, a “homestead” refers to the special protection given to the home of a family or a single adult from the owner’s creditors, the right of occupancy given to a surviving spouse, minor children, and unmarried children of a deceased owner, and favorable tax treatment accorded to the owner. Initially these laws were so strong that it made it difficult for Texans to obtain mortgages so the law has been amended through the years. The definition of a “homestead” has changed throughout the years but the principle has remained the same.

PRIMARY FEATURES OF THE HOMESTEAD EXEMPTION

1. They prevent the forced sale of a home to meet the demands of creditors (however, in most cases homestead exemptions do not apply to forced sales to satisfy mortgages, mechanics liens, or sales to pay property taxes);

2. They provide the surviving spouse with shelter;

3. They provide an exemption from property taxes which can be applied to a home.

4. Homeowner may only protect one property as a “homestead.

CURRENT HOMESTEAD EXEMPTIONS

If voters approve sb1 in Nov. 2015, the mandatory residence homestead exemption for school districts will increase and the school district tax ceiling will decrease. School districts, cities and counties will be prohibited from repealing or reducing a local option percentage residence homestead exemption adopted for the 2014 tax year until 2020. In a nutshell, this will bring the basic homestead exemption to $25,000 from were it currently sits at $15,000.

School districts are required to offer an additional $10,000 exemption on residence homesteads to persons age 65 or older or disabled. Any taxing unit, including a city, county, school district or special district, has the option of offering a separate exemption of $3,000.

Texas law provides partial exemptions for any property owned by disabled veterans and surviving spouses and children of deceased disabled veterans. The amount of exemption is deter­mined according to percentage of service-connected disability.