How Do Property Taxes Work in Senior Neighborhoods?
How Do Property Taxes Work FOR Senior Neighborhoods?
Along with their other financial concerns, property taxes for seniors who own their home ranks near the top. In many cases, the value of their home has increased so significantly over the years that they now find their property tax bill is becoming prohibitive, at a time when they’re often living on a fixed income.
This article will answer questions concerning how property taxes are calculated, how to qualify for an exemption, what the exemptions are in Tarrant County, Texas, and more.
How are property taxes calculated?
The calculation of property taxes always starts with an assessment. The local tax authority will send someone out to your property to appraise it and assign it a market value based on several factors, such as comparable sales in your area and any amenities you might have added.
For example, if the assessor determines the worth of your home is $400,000, and the locality assesses a tax rate of 3%, your annual property tax would be $12,000.
How do you qualify for an exemption?
Before we answer that, let’s take a quick look at what a property tax exemption is.
Exemptions are going to vary from state to state. For example, your state might freeze the value of your home when you turn 65, and even as your home continues to appreciate, the value above your home’s value when you turned 65 will be exempt from property tax.
Other states may reduce the value of your home that’s subject to taxation by a percentage or dollar amount. The federal government makes income tax laws, but not property tax laws.
Now that we’ve established what an exemption is, let’s look at how you qualify for one.
Several criteria must be met for you to qualify for a property tax exemption, just as there are for all tax breaks. The first criteria is that you must be age 65 or older. If you’re married and own your property jointly, only one spouse must be 65 or older.
In the state of Texas, you can continue to claim your exemption if your spouse who was over 65 passes away as long as you’re age 55 or older.
Many states require you to have owned your home for a prescribed period of time, such as 12 months. However, some states will allow you to carry that period of ownership over to your new home.
In Texas, a “homestead exemption” can be filed the first year you live in your home. It will be valid under three conditions:
- You live on the property.
- It is being used as your primary residence.
- You have a valid Texas driver’s license or Texas-issued personal identification certificate that matches your primary residence address.
Other types of exemptions you might qualify for are the disability exemption and the veteran exemption.
The disability exemption is for homeowners (not their children) who have a disability that would qualify for Social Security Disability (SSDI) benefits. Unfortunately, if you’re a senior and have a disability, you can’t take both of the exemptions – just one.
The veteran exemption is for veterans with a disability, their spouses and survivors, and spouses and survivors of military personnel killed during active duty.
How much can you save with the homestead exemption?
The amount you’ll save with your homestead exemption is going to depend on the exemption amounts and tax levels adapted by your city, county, and other local governments.
In Texas, the residential homestead exemption is a $25,000 reduction in value for school tax purposes. However, counties, cities, and special taxing districts can offer homestead exemptions up to 20% of the home's total value. Most counties in North Texas offer this 20% reduction.
The good news for seniors in Tarrant County is you get an additional $10,000 exemption for school districts, and the senior exemption amount is $50,000.
Remember, the deadline for filing a homestead exemption in Texas is April 30 of the tax year for which you are applying, and the exemption also limits the increase of your appraised value to 10% annually.
Seniors in the City of North Richland Hills in Tarrant County also benefit from a senior exemption and a tax ceiling (also known as a tax freeze). The ceiling is set in the year you turn 65. In future years, the property taxes on your home may go below, but not above, the ceiling amount.
Homestead exemptions can be filed online on the Homestead Exemption Landing Page.
Cities Real Estate
Dedicated and knowledgeable Fort Worth realtor/broker David Pannell of Cities Real Estate can help you live your dream in Robson Ranch. He helps his clients sell existing homes to launch them into new adventures and assists with the purchase of their new homes.
David is a life-long resident of the Fort Worth area, a family man, served in the U.S. Marine Corps, and is a former City of Arlington Police Officer. You can trust him to offer you an honest, ethical approach to selling your home. Call David today at (817) 797-9047.
(This article is for informational purposes only and is not providing tax guidance. Tax laws change regularly – consult with a qualified tax professional for definitive information on property taxes in your locale)
NTREIS data last updated March 28, 2024.
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