New Texas Law Aims To Curb Property Owners' Errors, Fraud In Obtaining Real Estate Tax Exemptions On Homestead Claims
- Some Texas homeowners are finding that they face new rules when applying for a homestead exemption on their property, the result of a new law that took effect in September.
- The rules — which lawmakers say are intended to prevent fraudulent homestead exemptions — will affect people whose circumstances have changed. That includes first-time buyers, those purchasing a new home or people who have become eligible for a different type of homestead exemption, such as turning 65 or becoming disabled. It will not affect homeowners who already have a homestead exemption on their primary residence.
- Homestead exemptions remove a portion of a home's value from taxation, lowering the amount of property tax a homeowner must pay. The measure's author, state Rep. Harvey Hilderbran, R-Kerrville, said the changes were needed to prevent property owners from claiming homestead exemptions on more than one property. Hilderbran said he heard complaints from appraisal districts across the state about homestead duplications — particularly from out-of-state and in-state residents filing exemptions for vacation homes.
- Jim Robinson, the Harris County Appraisal District's chief appraiser and legislative chairman of the Texas Association of Appraisal Districts, said the state needed to crack down on duplication of homestead exemptions.
- "You're talking about major theft, really, when (homestead duplication) occurs," Robinson said. "The homestead exemption is the single largest source of tax relief for people, and when you have people who are cheating on it and are saving gigantic amounts on taxes that they really should be paying, it means that the taxing units where this cheating is occurring have to set a higher tax rate, which penalizes everybody to raise the money that they need to fund their budgets."
- Robinson said one problem occurring all around Texas has been property owners applying for homestead exemptions for rental properties.
- "We had one case where a man and woman (in Harris County) had more than a dozen homesteads on their ... rental properties, and on each case, they used the address of the rental property, but they would use a different variant of their names. On some of them, they would show both of them as the owner; on some they would show either the husband or the wife as the owner," Robinson said.
For more, see Texans adjusting to changes in homestead exemption rules.