Archive for the ‘Tax loopholes and exceptions’ Category

The Senior Citizen’s Guide to Property Taxes

Published by Research Editor on February 23rd, 2013 - in Tax loopholes and exceptions, Taxes, The Basics

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Senior citizen by allspice1, on Flickr
While American culture at large does not seem to respect or revere its mature citizens the way other cultures do, laws are written to benefit senior citizens more than just about anyone else.

As a senior aged 65 or older, you are entitled to extra exemptions, a tax ceiling, payment in installments, and tax deferral.

Exemptions

As a homeowner, you get a $15,000 homestead exemption. As someone 65 or older, you also get a $10,000 exemption on top of that. Be sure to apply for both!

Tax Ceiling

When you apply for the $10,000 Senior exemption, the school taxes on your property are limited. Even if the market explodes and your $100,000 house is suddenly worth a million dollars, some of your property taxes will be based on that $100,000 value. See our article on tax ceilings for more details.

Installments

As a mature citizen, you have the option to pay your property taxes in installments. Instead of paying your entire property tax bill by January 31, you have the option to make four payments, ending in July. Click here to see our guide for more details.

Deferral

Your final option is to defer your taxes. This means you can postpone paying your taxes as long as you live in your home. You won’t be foreclosed on.

Deferral doesn’t mean that the taxes are gone–you must pay them eventually. They also accrue 8% interest each year while they are deferred. But deferral is an option for those times you just aren’t able to pay.

Your Options

Senior Citizens have more options than most when it comes to property taxes. The law is written to be more lenient toward seniors than anyone else. It is your right to use as many exemptions and benefits that you qualify for.

4 ways to lower your property tax bill

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1. Claim your exemptions!

Exemptions exist to lower your tax bill. Take as many as you qualify for.

  • Homestead exemption. This significantly lowers your bill.
  • 100% disabled veteran’s exemption
  • Partially disabled veteran’s exemption

2. Set a tax ceiling on your taxes.

Property tax ceilings are for residents 65 or older and limit your taxes.

3. Look for errors.

We’re all human, and mistakes do happen. Look over your tax bill carefully to ensure it is correct.

4. Protest if your assessment is incorrect.

The Texas constitution guarantees your right to equal and uniform property taxes. Your property taxes can’t be significantly higher than a similar property with similar characteristics. However, appraisers don’t appraise your specific house every single year, so their assessment might be off.

If your house has been appraised incorrectly, follow our outline to protest the appraisal. The lower your appraisal, the lower your property taxes will be.

Property Tax Ceiling

Published by Research Editor on January 22nd, 2013 - in Tax loopholes and exceptions, Taxes

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Great news! If you are 65 or older, your taxes are limited. Even if the market explodes and your $100,000 house is suddenly worth a million dollars, some of your property taxes will be based on that $100,000 value.

How does this work?

When you apply for a property tax ceiling, the school taxes on your home can’t increase–even if your home value does–for as long as you live in that home.

Your property taxes are based on several districts or jurisdictions, like school, city, county, hospital, and water. Each district collects property taxes from you. The tax ceiling limits how much property taxes the school district can collect. However, some counties allow the tax ceiling to limit how much city, county, and college districts can collect, as well.

So the tax ceiling applies to school taxes within my property taxes. What about the county taxes? Water tax district? Hospital? Junior college?

The tax ceiling in NOT applicable to water, hospital, and other special districts.

City, county, and Junior college district property taxes are sometimes subject to the tax ceiling limitation. The County commissioners court, city council, or board of the junior college district can authorize a atax limitation of homesteads for those disabled or 65 or older. Check with your county to see if this applies to you.

Who qualifies for the property tax ceiling?

Anyone who has received an over 65 or disabled person homestead exemption.

What if I improve my home?

Home improvements will raise the tax ceiling.

What if I move?

You can transfer a percentage of the tax ceiling to your new home. The Comptroller of Public Accounts offers this example:

If you currently have a tax ceiling of $100, but would pay $400 without the ceiling, the percentage of tax paid is 25 percent. If you move to another home and the taxes on the new homestead would normally be $1,000 in the first year, the new tax ceiling would be $250, or 25 percent of $1,000.

How do I transfer a tax ceiling?

You can get a certificate from the chief appraiser in the district where you received the tax ceiling. When you apply for homestead exemptions on your new home, bring the tax ceiling certificate to the chief appraiser in the district where your new home is.

If I am the surviving spouse of someone who was entitled to the tax ceiling, can I get it, too?

Depends.

If you are the surviving spouse, 55 years of age or older, and your spouse was 65 years of age or older, you may benefit from the tax ceiling.

However, if you are the suriving spouse of a disabled person who qualified for the tax ceiling, you cannot benefit.

Where can I find out more?

The information in this article was researched at the website of the Comptroller of Public Accounts.

Property Taxes in Disaster Areas

Published by Research Editor on September 17th, 2012 - in Tax loopholes and exceptions, Taxes

If your home is damaged in a designated disaster area, you may pay your taxes in four installments.

What is a designated disaster area?

During an emergency, the governor of Texas will declare a state of disaster in the affected counties. For example, in 2010 and 2011, Governor Rick Perry declared every Texas county a state of disaster due to extreme fire threats. If your home was damaged by the fires, you can opt to pay your property taxes in four installments.

How do I apply for installments?

There is no application. However, when you send in your first installment, you must also send written notice that you will be paying your taxes in installments.

When do I need to pay my taxes?

Pay the first 1/4 of your property taxes before Feb 1, along with a notice that you will pay the rest in installments.
Pay the second 1/4 before April 1.
Pay the third 1/4 before June 1.
Pay your final payment before August 1.

What if I miss a deadline?

If you miss a deadline, you will pay 1% interest for each month of delinquency, PLUS a 6% penalty on the unpaid portion.

For more information, see “Property Tax Issues in Disaster Areas” on the Comptroller’s website.
If you are having difficulty paying your installments, consider a property tax loan among your options.

New Homestead Residence Exemption Application

Published by Research Editor on May 4th, 2012 - in Tax loopholes and exceptions, Taxes

Revised Homestead Exemption

 

The Texas Comptroller of Public Accounts has revised the Application for Homestead Residence Exemption form.

While the changes to the form are relatively minor, be sure to use the updated form when applying for a homestead residence exemption.

In addition to now providing a space for a spouse’s birthday, the form also now explains the documentation you’ll need to provide if you’re applying for a disabled veteran residence homestead exemption.

How the Texas Homestead Tax Cap Works

 

How the Texas Homestead Tax Cap Works: in simple terms.

For homes that are receiving a homestead exemption, which is any property that the owner considers their primary residence, the appraised value may be lower than the property’s market value because of what the law refers to as the “homestead cap.”

Currently the law states that, while a property’s January 1st market value isn’t capped, the property’s appraised value is capped at a maximum increase of 10% from the previous year.

So, let’s say:

  • The market value of someone’s home on Jan 1st is $200,000
  • But, the year prior it was only valued at $170,000.
  • This year’s appraised value would be $187,000, which is an increase of 10% from the previous year.

But in some situations, the value of the home can go down while the appraisal goes up.
Lets pretend that next year, something happens and:

  • The home’s value drops from $200,000 to $190,000.
  • The cap for that year would be $205,700.
  • The appraised value would increase from $187,000 to $190,000.

and taxes would increase even though property value decreased.

To qualify for the cap, the owner must first receive the homestead exemption, then the value must increase more than 10% within a year.

For more informative tax articles and videos, visit fypllc.com.
For a property tax loan, visit TexasPropertyTaxLoans.com.

New Property Tax Exemption

Published by Research Editor on November 10th, 2011 - in Tax loopholes and exceptions
New tax exemption

 

On Tuesday, more than half a million Texas voters chose to grant tax exemption to surviving spouses of disabled veterans.

 

Proposition 1 transfers the homestead property tax exemption of a totally disabled veterans to their surviving spouse after the veteran’s death.  Prior to this, the exemption was lost when the veteran died, essentially giving the surviving spouse a sudden property tax bill along with the funeral costs.

 

In recognition of the sacrifice of veterans and their spouses, the proposition to give tax exemptions to surviving spouses passed with 83% support.

Exemptions

Published by Research Editor on August 12th, 2011 - in Tax loopholes and exceptions, Taxes

Homestead exemption

Exemptions are one of your 12 rights as a taxpayer. For your principal residence, you have homestead exemptions available:

  • General residence exemption: $15,000 off your property value for school taxes
  • $3,000 exemption if your county collects a special tax for farm-to-market roads or flood control.
  • Age 65 or older: $10,000 exemption
  • Disabled: $10,000
  • Optional percentage exemption: a taxing unit may offer an exemption of up to 20% of home’s value, not less than $5,000
  • Optional 65 or older/disabled exemptions: a taxing unit may offer an additional $3,000 exemption to the $10,000 exemption.
  • Other exemptions

How do I get the $15,000 general residence exemption?

File an Application for Residential Homestead Exemption up to one year after your taxes are due.

Do I reapply each year for the $15,000 general residence exemption?

Nope. Just once, unless the chief appraiser sends you a new application.

What if I move?

If you move or are no longer qualified to receive the general exemption, inform the appraisal district in writing before the next May 1.

What are the “other exemptions” available?

That depends on your appraisal district. Dallas County, for example, offers exemptions for charitable organizations, religions, pollution control properties, goods exported from Texas, and certain motor vehicles. To find out your district’s exemptions, search online for “[Your County] property tax exemptions.”

100% disabled veteran’s exemption

  • Served in the armed forces of the US
  • Classified as disabled by the US Department of Veterans Affairs
  • Received 100% disability compensation from the VA
  • Received either 100% disability rating or classified unemployable by the VA
  • Own and live in your home.

How do I get this exemption?

Apply for the exemption with the appraisal district using this Application for Residential Homestead Exemption. Be sure to check the “100% Disabled Veterans Exemption” box on the second page.

What if I own the house with my spouse?

You are eligible for 100% exemption of your ownership interest. If you own the house equally with your spouse, that amounts to a 50% exemption.

What if I’m a partially disabled veteran?

You get a partial exemption. Check this document from the state for the exact dollar amount.

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