Fort Worth Real Estate Online


Using the Homestead Exemption to Your Buyer's Advantage...

It's that time again.  As the end of the year approaches, once again we have our "yearly chance" to use the Homestead Exemption as a closing technique.  Actually... it is much more than simply a closing technique... it is just one more great reason for a "sitting on the fence" buyer to get off that fence... and get themselves a home.

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 living in.


A general explanation of how it works is as follows:  Certain entities that "tax" an owners home real estate dwelling will "exempt" a portion of the home's taxable 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 of home ownership that can very easily be taken advantage of.  The only "catch" is, that in Texas, 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, 2008... they are "in title"... or they "own" that property as of January 1, 2009, and are eligible for a tax break for the ENTIRE year of 2009.  IF you miss it by even a day, and perhaps close on your home on January 2, 2009, you are not eligible for the Homestead Exemption until January 1, 2010.

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.

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.

If you are ready to go from "Just Looking" to "Let's Get Serious"... call the New Home Hotline at (817) 929-3400 to start your very own personalized search for your new home.  And remember... if you close on it by Dec 30, 2008... you will have your Homestead Exemption activly saving you tax dollars... for the entire 2009 year !

Comment balloon 12 commentsKaren Anne Stone • September 12 2008 01:59AM


Karen Anne,

We also have homestead in Florida, and this year it was doubled. Used to be $25,000 of the assessed value, now there is another $25,000. And it works the same day. You can claim homestead until March, but you have to own the property on the 1 of January, and  you are absolutely correct, January 2 would not count.

I do not know whether this would help those sitting on the fence, but if someone plans to buy in February, March or April, it would make a lot of sense to get the tax brake.

Thanks for reminding me.

Posted by Jon Zolsky, Daytona Beach, FL, Buy Daytona condos for heavenly good prices (Daytona Condo Realty, 386-405-4408) almost 12 years ago

Jon:  The Homestead Exemption is just one more good reason why anyone who is "teetering" about buying... should buy and close before the end of the year.  It will truly same them some money.  And... free money is the best kind... LOL.  Thanks so much for commenting.  And... you are very welcome.  Take care...

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) almost 12 years ago

Hi Karen - We too, have a homestead exemption and I never thought of using it as a marketing tool.  Great idea!!

Posted by Margaret Mitchell, Seacoast Maine & NH Real Estate (Coldwell Banker Yorke Realty) almost 12 years ago

Karen Anne - We do not have a genreal homestead rule.  The homestead exemption is available IF a homeowner is of a certain age and meets income guidelines.  This is the only state I've ever lived in that did not have a general homestead exemption.  And it really ties our hands when it comes to encouraging home sales.

Posted by Carol Smith (Casmi Photography) almost 12 years ago

Billy:  Yes... combine this with the tax credit, and our buyers have one more thing working for them.  Thanks for your kind comment.

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) almost 12 years ago

Margaret:  Using the Homestead Exemption to remind buyers of all the benefits of home ownership can really make a difference.

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) almost 12 years ago

Carol:  It really surprises me that Ohio does not have a general homestead rule.  But, then again, there are a few other quirky things about some Ohio laws that surprise me.  Our poor first time buyers need all the help they can get.

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) almost 12 years ago

Karen Anne,

I wish we had the Homestead Exemption here in Pennsylvania.  You're very lucky to have it.

Have you made the call that you are supposed to make?

I'll be calling you to check if you did.


Posted by Adele Irving - Easton Area Homes (Prudential Patt, White Real Estate) almost 12 years ago

OK.  You've convinced me.  I am ready to buy.  When can we get started?  :)

BTW... I will need a stated income mortgage... hope that won't be a problem!

Posted by Steve Shatsky almost 12 years ago

Adele:  I am surprised you do not have a state Homestead Exemption.  I thought Pennsylvania was a pretty progressive place.  And that phone call.  Ummm... is "I'm skeered and I want my mommy" be a good reason ? 

Now... I did make another phone call that you and I talked about.  It's one you made perhaps within the last month.  So... Ian is going to be missing both of us.  :)

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) almost 12 years ago

Steve:  First... let's get together and figure out just exactly what type of home suits you best.  Then... we need to get you a pre-approval letter.  Stated income is just fine... not a problem at all... as long as you have an 830 credit score and about 40% down.  But... you're a Realtor... so that should not be a problem, right ?  [ cough, cough ]  :)

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) almost 12 years ago

Hi, in June Indiana put the homestead exemption on the new sales disclosure form so that it happens automatically when you close.  They still have to file their own mortgage exemption but the homestead is so much more important here.



Posted by Cindy Marchant, "Cindy in Indy" , Realtor, Fishers Real Estate (Keller Williams Indy NE 317-290-7775 almost 12 years ago