Tips for Avoiding Taxes for Homeowners

November 23, 2015
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By Mary Belan Doggett

Property values continue climbing across Texas. Seniors need to take advantage of every possible way to minimize taxes on their home. Five things they should do:

  1. Every homeowner 65 or older should claim the Elderly Homestead Exemption. This knocks off $10,000 from the appraised value of the home for school taxes. This is in addition to the $25,000 homestead exemption (as of the Nov. 3 election) available to all Texas homeowners. Local taxing entities such as counties and cities may be able to offer additional $3,000 exemptions.
  2. Explore various ways to pay property taxes. For those who can’t afford a lump sum, one-time payment, state law allows seniors to pay in four quarterly, equal installments without penalties or interest. In some counties, the bill may also be split into two parts, with half due Nov. 30 and the remaining half due June 30, without penalties or interest.
  3. Before turning 65 and filing for the Elderly Homestead Exemption, seniors should protest the value of their home and get the value reduced as much as possible. Once they file for the Over 65 Exemption on school taxes, the assessed value of the home usually cannot be increased unless improvements to the property are made.
  4. Seniors might also want to consider a tax deferral when they turn 65. In other words, stop paying property taxes by applying to the local appraisal district for a deferral. If granted, a deferral means the homeowner who lives in the home is not required to pay any property taxes on it. But be aware: A deferral means taxes still accrue even though you don’t have to pay them. The unpaid bill is also assessed 8 percent annual interest. When you die or no longer live in the home, your surviving spouse or heir may be responsible for back penalties or interest if the taxes remain unpaid 181 days after the deferral expires. The exception is that if the surviving spouse is 55 or older, they can keep the deferral in place.
  5. Those who inherit property should not put off paying any property taxes due. If the appraisal district discovers that the 65+ exemption remains in place the year after the property changes hands (and the new owner isn’t eligible), they will supplement the tax roll with the difference in taxes, and may assess back penalties and interest, if not paid quickly.

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