Do Your Property Taxes Go Down When You Turn 65 in Texas?

Turning 65 in Texas can bring about beneficial changes to your property tax obligations. The state provides specific property tax benefits designed to offer relief to homeowners who reach this age milestone. These provisions can lead to notable reductions in annual tax bills, easing financial burdens for seniors. Understanding the various programs available is important for eligible individuals seeking to maximize their savings.

Understanding the Over-65 Homestead Exemption

The Over-65 Homestead Exemption in Texas offers a significant reduction in the taxable value of a primary residence, lowering the portion of a home’s appraised value subject to property taxes and directly translating to a lower tax bill. School districts are mandated by state law to provide an additional $10,000 residence homestead exemption for persons aged 65 or older, beyond the general homestead exemption available to all homeowners.

Many local taxing units, including cities, counties, and special districts, also offer optional homestead exemptions for seniors. These local exemptions can vary in amount, from fixed sums to percentage-based reductions. The combination of the statewide school tax exemption and any applicable local exemptions further reduces the overall assessed value on which property taxes are calculated. For instance, if a home is appraised at $300,000 and qualifies for a $100,000 general homestead exemption, plus a $10,000 over-65 exemption, school taxes would be paid on an assessed value of $190,000.

The Property Tax Ceiling for Homeowners Over 65

The property tax ceiling, often referred to as a tax freeze or limitation, is a benefit for homeowners over 65 in Texas. This ceiling primarily applies to school district taxes and limits the amount of school property taxes that can be imposed on a qualified homestead. Once a homeowner qualifies for the over-65 exemption, the school taxes on their home cannot increase above the amount paid in the year they turned 65 or the year they first qualified, if later.

While the market value of the property may continue to rise, the school tax portion of the bill remains capped, providing long-term predictability and protection against increasing tax liabilities. If school tax rates decrease in subsequent years, the actual amount due may fall below the ceiling, but it will not exceed the frozen amount unless significant improvements are made to the home, such as adding a new room or garage. Some local taxing units, in addition to school districts, may also adopt a tax ceiling for their portion of property taxes. This tax ceiling prevents future increases in the school tax amount, distinct from the homestead exemption which reduces taxable value.

Qualifying and Applying for Senior Property Tax Benefits

To qualify for the Over-65 Homestead Exemption and the Property Tax Ceiling, specific criteria must be met. The homeowner must be at least 65 years old, and the property must serve as their primary residence. The exemption is effective as of January 1 of the tax year the owner turns 65, and an individual can apply anytime after turning 65 to receive the exemption for that entire year. Ownership interest in the property is also required.

Before applying, a homeowner should gather necessary documentation. This includes proof of age, such as a driver’s license or birth certificate, and evidence of ownership and residency, like a deed or a recent utility bill. The official application form, Texas Comptroller Form 50-114, is available through the county appraisal district’s website or office. When completing the form, ensure personal details, property information, and the specific exemption requested are clearly provided.

Once the application and supporting documents are prepared, submit them to the appraisal district in the county where the property is located. Submission methods include mailing the application, submitting it in person at the appraisal district office, or utilizing an online portal if available.

The general deadline for filing most exemption applications is April 30th of the tax year. However, for the over-65 exemption, a late application can be filed up to two years after the date the homeowner became 65 or up to two years after the delinquency date for the taxes.

After submission, the appraisal district will process the application, and approval results in the exemption being applied to the property’s tax bill. Once approved, reapplication is not required annually unless requested by the chief appraiser.

Property Tax Deferral for Texas Seniors

Property tax deferral offers another form of financial relief for homeowners aged 65 or older in Texas. This option is distinct from exemptions and ceilings, as it does not reduce the amount of taxes owed but postpones their payment. Seniors can postpone the payment of current property taxes on their homestead for as long as they own and occupy the home. Interest continues to accrue on the deferred amount at a rate of 5% per year for taxes deferred on or after January 1, 2018.

To initiate a deferral, an affidavit must be filed with the county appraisal district. A tax lien remains on the property for the deferred taxes, meaning the accumulated amount becomes due when the property is no longer owned or occupied by the qualifying individual, such as upon sale or inheritance. While deferral can prevent foreclosure actions due to unpaid taxes, it is a temporary measure, and the tax liability is not canceled. This option provides flexibility for seniors facing immediate financial challenges, allowing them to manage their cash flow without immediately paying their property tax bill.