The end of the year is coming ... and with it there is a Year End Bonus For Buyers out there to be had. The problem is there's only about four months left in the year to take advantage of it.
Actually... it's much less than that... depending on how long it takes you to go from having an accepted offer... to a closed and funded sale.
I am talking about The Homestead Exemption.
Texas as a state is one that very much encourages Individual Home Ownership. People who own their homes are more likely to take part in local area activities. They are more likely to vote, and more likely to run for offices like school boards, city council positions, mayors of their city, and even state-wide positions. This is something that is Good For Texas, and it's something that's Good For You.
The Homestead Exemption is something that many people who are renting homes or apartments may not be aware of. The net effect of the Homestead Exemption is sort of a "discount" on a property owner's real estate taxes... but it's only for a person's "homestead"... which is the home they own, and that they are personally living in.
A general explanation of how it works is as follows:
If you have the Homestead Exemption on your home, certain entities that "tax" an owners home will "exempt" a portion of the home's value from property taxes. For example, if that taxing entity is a local ISD or Independent School District, it may "exempt" a portion of the value of that home from being taxed. If that home is worth $140,000, and the portion of its value exempted is $20,000... it's like getting a 14% tax discount on that portion of a homeowner's yearly tax bill due the local ISD.
Sometimes the amount may be small, sometimes it may be larger, but nonetheless, it is a money-saving feature that owning your own home provides, and one that can very easily be taken advantage of.
The only "catch..." in Texas and in most states, is that a homeowner will only qualify if they actually OWN the property as of January First of the taxable year in question. That means... if a buyer closes on their home this year on December 28, 2012... they are "in title"... or they own that property as of January 1, 2013, and are then eligible for a tax break for the ENTIRE year of 2013.
IF you miss closing on your home in 2012... if even by only ONE day, you lose a full year of these tax benefits, and are not eligible again for the Homestead Exemption until January 1, 2014.
So... if you are sitting on the fence, wondering if buying a home in the next few months is a good idea, here is just one more reason why it is to your advantage to own your own home.
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