How to Save Money on Taxes with a Homestead Exemption

As we get further into tax season, homestead exemptions are a great way to reduce your taxable income by setting limits on how much your property taxes can increase each year.

If you own a house in the Austin area as of January 1st of a given calendar year, make sure to file a homestead exemption after your closing date. 

A homestead exemption removes a portion of your home’s value from taxation. It also limits the increase of your property taxes to a maximum of 10% per year. It only has to be filed one time. You are eligible to file if your home is your primary residence. Second homes and investment properties are not eligible.

Before you file, your driver’s license must be up to date with your new home’s address.

For homes purchased in Travis County:

  • E-file online here OR 
  • Download the paper form here and mail your exemption to 850 East Anderson Lane, Austin, TX 78752

For homes purchased in Williamson County:

  • E-file online here
  • Call 512.930.3787 with questions or use the chatbox on their site

 

**There is no fee to file a Homestead Exemption** 

 

Note for homes purchased in 2021 and later: Prior to January 1, 2022, homestead exemptions could not be filed until the year after a home was purchased. As of 2022, homeowners may file for a homestead exemption immediately upon closing on their property as long as an exemption has not yet been filed for that tax year. However, the 10% limitation on a Texas homestead will not go into effect until you’ve owner-occupied the home for a full tax year (January 1st – Dec 31st). 

If you purchased in 2021 and are filing an exemption for 2022, your exemption should take effect 4-6 weeks after filing, but the 10% cap will not kick in until next year and will be based on this year’s final taxation amount.

If you purchase(d) a property in 2022, you can file your exemption immediately, and the 10% cap will go into effect beginning January 1 of 2024 as long as you owner-occupy your home as of January 1, 2023.

The massive price increases that began in early 2021 have caused many homeowners’ property tax valuations to increase significantly more than in past years. For information on how to protest your property taxes, check out this post.

I’d love to be your resource for all things real estate, so please reach out with questions any time.

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