Do I need to do anything to prepare for Homestead? (Howe: comparable sales, real estate)

[Surfertx]

First time home buyer (purchased March 2016) and I'm reading up on Homestead. How does this work? I thought my mortgage paid the property taxes? I live in Harris County Cypress.

[asonnier]

Homestead is an exemption for your property taxes, property taxes are taxes that you pay based on the value of your home. You may have the amount added to your mortgage to help pay your taxes. If so your mortgage company would be able to tell you. It should be in escrow to cover taxes if you wanted that when you bought the house.

[Surfertx]

Originally Posted by asonnier

Homestead is an exemption for your property taxes, property taxes are taxes that you pay based on the value of your home. You may have the amount added to your mortgage to help pay your taxes. If so your mortgage company would be able to tell you. It should be in escrow to cover taxes if you wanted that when you bought the house.

Yes I checked and it is in escrow. However, I don't understand the part where my house will be appraised each year. Does this mean that I may owe property taxes if the value of my house is higher even with monthly payment to escrow?

[Liljo22]

Originally Posted by surferdude949

First time home buyer (purchased March 2016) and I'm reading up on Homestead. How does this work? I thought my mortgage paid the property taxes? I live in Harris County Cypress.

You just need to fill out the paperwork at the below link and return to the appraisal district with your driver's license that has the address on it that you are applying for. Since you purchased in March 2016, it will apply to your 2017 taxes. You will need apply between January 1 and April 30th of next year.

http://www.hcad.org/pdf/forms/2016/11-13_v0116_fill.pdf

[Liljo22]

Originally Posted by surferdude949

Yes I checked and it is in escrow. However, I don't understand the part where my house will be appraised each year. Does this mean that I may owe property taxes if the value of my house is higher even with monthly payment to escrow?

Yes or less if your value goes down. If its less, the bank will refund the difference in your escrow account when they do the analysis that year.

You should also protest your appraisal value every year. You can either do it yourself by filing a protest and meeting with the district or you can use one of the companies that protest it for you. They usually take between 30%-50% of the tax savings you received by the judgement. If you do it yourself, you will need to show comparable sales(Comps) for homes in your area around January 1st of that year. Your real estate agent should be able to pull that info for you.

[trbstang]

Yes, apply for it early next year. Since you are in Cy Fair ISD, you should see a savings of about 15-18% on your total taxes since I believe I recall your home was in the $200s. My home is valued at $275K, and I save about 15% or so. Look up your house on Harris County Appraisal District to see what the appraised values are currently, and that is what your taxes for 2016 will be based on. Your mortgage company will pay the taxes and early next year will do an escrow analysis to see if you need to pay more per month for 2017, or less. Chances are once the Homestead exemption is applied, your monthly escrow payment will go down, but if your mortgage company does their analysis before the exemption is applied, you will not get the lowered escrow payment in 2017. This will result in an over funded escrow for 2017, and you will get a reduction in your payment for 2018.

Good luck!

[Surfertx]

Originally Posted by trbstang

Yes, apply for it early next year. Since you are in Cy Fair ISD, you should see a savings of about 15-18% on your total taxes since I believe I recall your home was in the $200s. My home is valued at $275K, and I save about 15% or so. Look up your house on Harris County Appraisal District to see what the appraised values are currently, and that is what your taxes for 2016 will be based on. Your mortgage company will pay the taxes and early next year will do an escrow analysis to see if you need to pay more per month for 2017, or less. Chances are once the Homestead exemption is applied, your monthly escrow payment will go down, but if your mortgage company does their analysis before the exemption is applied, you will not get the lowered escrow payment in 2017. This will result in an over funded escrow for 2017, and you will get a reduction in your payment for 2018.

Good luck!

I looked up my house and it's appraised at 232k but I paid a lot less for it. So this means I need to protest the appraisal?

[Liljo22]

Originally Posted by surferdude949

I looked up my house and it's appraised at 232k but I paid a lot less for it. So this means I need to protest the appraisal?

Too late to protest it this year. Protests need to be filed by 5/31. When your appraisal comes out around April next year, you can file the protest for it. I would use your purchase price as part of the appraisal but since the appraisal is based on value at January 1, you will also need comps. They may try to argue that prices have risen since your purchase date.

Also, if the previous owner already had a homestead exemption on the home for 2016, you will still receive credit for that exemption and any other exemptions they may have had(ie over 65 exemption). That goes away in 2017 and you will need to file. It should show on the Harris County website whether they have exemptions.

[houstongal22]

Originally Posted by surferdude949

First time home buyer (purchased March 2016) and I'm reading up on Homestead. How does this work? I thought my mortgage paid the property taxes? I live in Harris County Cypress.

Yes! your lender pays your property taxes, however you are responsible to file the homestead exemption with your county. At the beginning of the year I usually mail blank forms to my clients closed the previous year, that way they don't forget. It's so easy to forget this. In order to claim homestead for the current year you have to have lived in the property as of January the 1st, sine this is not your case you have to wait until 2017 to file for the exemption and it will be effective for the same year. In the meantime for this year the previous owners exemptions remain in place.

In regards to your valuation as mentioned in previous response it had to be filed prior to May 31, you would need to bring comparables for the area specifically similar properties I would focus on the lower prices of course and show why mine's value is lower ie. Mine is smaller, or older, or condition is not as good, I have a smaller lot, point out if they have any type of major upgrades ie. new roof, it has a pool, recently remodeled and so on it has to be major key structural and updates that will affect value.

Your monthly payment for taxes go into escrow and the mortgage company pays your annual taxes from there. If they already did your escrow analysis after you dispute your appraise value with the county and you are successful then you need to go back to your mortgage company and tell them your appraised value has been adjusted and ask them to do a new escrow analysis to reflect the change in your monthly payment.

[hendersj31]

FYI you can file on line now. You will need to upload both front and back pictures of your drivers license along with the completed form.