Texas Property Tax Exemptions for Senior or Disabled Homeowners

Property taxes can be an annual headache at any age, but being on a fixed income leads homeowners to start looking for more ways to save money. The good thing is there are tax exemptions available to senior and disabled homeowners in Texas to help lower their property taxes.

Freezing property taxes at 65 and applying a tax ceiling relieves the stress of worrying about tax increases. From deferrals to exemptions, Texas homeowners have options when it comes to their property taxes.

At What Age do Seniors Stop Paying Property Taxes in Texas?

It's a misconception that seniors don't have to pay property taxes. However, they can choose to defer their taxes, postponing annual payments. Homeowners over 65, disabled homeowners, and disabled veterans may choose to defer property taxes under Section 33.06 of the Texas Tax Code. In this case, property taxes are postponed until the estate is settled or the property is sold. This is a benefit to anyone on a fixed income, and the taxes still get paid in the end.

Texas seniors also qualify for a partial homestead exemption from property taxes. To receive the exemption, homeowners must be 65 years of age or older. This exemption is also available to disabled homeowners without the 65+ restriction.

How to Apply for a Property Tax Deferral

You can apply for a deferral by completing forms provided by your county appraisal district office. Many of these forms can be found on your appraisal district’s website.

First, you will need to fill out Form 50-114, the Residence Homestead Exemption Application. Most counties require this for all property owners residing in the county.

If you are applying as a disabled homeowner, you will need to complete an Affidavit of Disability. You’ll also need to submit supporting documents from a doctor or your Social Security Administration Disability Determination letter. 

You will need to fill out the Tax Deferral Affidavit (Form 50-126) and Tax Deferral Affidavit for Appreciating Residence Homestead Value (Form 50-274).

Finally, you may need to fill out an Appraisal Increase Deferral Affidavit and include verification from the tax office regarding legal maximum deferral amounts. Deferred taxes are due within 180 days of selling the home or the home changing ownership.

The deadline to apply for a deferral is April 30 of the tax year for which you’re applying.

Property Tax Freeze for Seniors in Texas

In Texas, property owners who are over 65 can freeze their school property taxes. This is sometimes referred to as the “senior freeze.” Freezing property taxes at 65 caps the amount of property taxes assessed and prevents your school property taxes from ever increasing. Since school district taxes make up the bulk of the typical homeowner's property tax bill, this is a considerable boon. In some districts, the senior freeze may also apply to county, city, or junior college district taxes. It typically doesn't apply to hospital taxes or other special districts, however.

This property tax ceiling gets set into place the year you turn 65. Your taxes can be reduced if tax rates go down, but they will never go above the cap.

The only reason your property taxes would increase is if you make substantial improvements on the property that significantly increase the assessed value. For example, if you add space to your home, like a new room addition, your taxes will likely go up. Regular repairs and maintenance that don't add value to the home will not increase your taxes.

When you take advantage of freezing your property taxes at 65, you will prevent your taxes from increasing and make your tax bill more predictable each year. That relieves some of the burdens of homeownership while on a fixed income.

Can You Transfer the Tax Ceiling to a New Home?

Yes, you can transfer a percentage of your school district tax ceiling. The difference between what your old tax ceiling was and your new ceiling will be calculated to ensure you pay the same rate as that of the original tax ceiling.

So, for example, if your taxes without the ceiling are $500 and with the ceiling, they're reduced to $100, then your tax percentage is 20%. If you move, and your new taxes are $1,000, then your tax ceiling on the new property would be 20% of that, or $200.

To transfer your tax ceiling, you can request a transfer certificate from the chief appraiser where the initial tax ceiling was issued. Then, you give the transfer certificate to the new appraisal district and the chief appraiser. You may also have a local option to transfer within the same district.

Can a Surviving Spouse Keep the Tax Ceiling?

The surviving spouse of someone over 65 receiving a tax ceiling may keep the tax ceiling in place if they were over 55 when their spouse passed. The surviving spouse must reside in the residence on which the tax ceiling was applied, and they must continue to claim the exemption.

If the surviving spouse moves to a new home, they may be able to transfer a portion of the tax ceiling as described above.

How Much is the Texas Over 65 Tax Exemption?

All homeowners in Texas can apply for a standard residence homestead exemption that can relieve $40,000 of taxable property value. Seniors in Texas can get an additional $10,000. Disabled homeowners also qualify for a $10,000 exemption.

In addition to the above exemptions, some taxing districts can offer even more exemptions. For example, the city of Plano offers an exemption of up to 20% of a home’s value, as allowed under Tax Code Section 11.13(n). Other local-option exemptions include additional $3,000 senior/disabled exemptions offered by some taxing units.

Most seniors in Texas can qualify for a significant reduction in their property tax values depending on the city and county where their homestead exemption is filed. Check with your appraisal district to see what local exemptions may be available.

Can You Combine Over 65 and Disability Exemptions?

The over-65 and disability property tax exemptions cannot be combined. The disability exemption acts in the same way as the over-65 tax exemption. However, disabled homeowners over 65 may qualify for both exemptions, as long as they’re applied to different taxing units. While you may not be able to combine both exemptions to a $20,000 exemption on school taxes, you may be able to apply the second $10,000 exemption elsewhere. Since property taxes are calculated on a local basis, it’s advisable to clarify the details with your county’s appraisal district.

As with the over-65 exemption, the disability exemption cannot be less than $5,000 and no more than 20% of the home's value. Disabled homeowners can also qualify for additional local-option $3,000 exemptions offered by the county and city they live in. 

How to Apply For an Over 65 Property Tax Exemption

As of 2005, the over-65 exemption is automatically applied if your date of birth is on file with your homestead exemption. For a surviving spouse to qualify, they must apply.

So there’s no need to apply if you have a homestead exemption and your date of birth is recorded in your homestead exemption file with the appraisal district. If your date of birth is not on file, you will need to contact the appraisal district to file the proper forms.

Once the application for the exemption is approved, the exemption goes into effect the year that you turn 65. The exemption is in effect for the entire year.

If you're applying as a disabled homeowner, you'll need to submit the standard homestead exemption form and disability documentation such as the Social Security Disability letter or a Verification of Disability form submitted by a physician.

Lowering Taxes as a Senior Texas Homeowner

Older homeowners have a number of ways to apply for exemptions and lower their Texas property taxes. They can also freeze school district taxes, so they never increase, or choose to defer their yearly taxes to a later date.

The best way to learn about what exemptions you qualify for is to visit the website of the county appraisal district where your residence is located. You might be surprised at how much you will be saving on property taxes when you reach 65.

Ready to live your best life in Texas? Call The RealFX Group at (512) 956-7390 to contact an experienced local real estate agent who can help you discover the Texas home of your dreams.