Have you noticed a savings on property taxes with the homestead exemption? (middle-class, how much)

[CptnRn]

Originally Posted by tamaralj

Tax breaks for seniors: If you are age 65 or older, or disabled, you qualify for the homestead exemption as soon as you turn 65; you need not own your home on January 1, but the home must be your principal residence.

The general homestead exemption is available to all property owners, not just those 65 or older.

For those 65 and older or disabled they can qualify for an additional exemption.

Travis Central Appraisal District

Is it true that once I become 65 years of age, I will not have to pay any more taxes?
No, that is not necessarily true. If you are 65 or older your residence homestead qualifies for more exemptions which will result in greater tax savings. The amount of the exemptions that are granted by each taxing unit is subtracted from the market value of your residence and the taxes are calculated on that “lower value”. In addition, when you turn 65, you may receive a tax ceiling for your total school taxes; that is, the school taxes on you residence cannot increase as long as you own and live in that home. The ceiling is set at the amount you pay in the year that you qualify for the aged 65 or older exemption. The school taxes on your home subsequently may fall below the ceiling.

[tamaralj]

That's good information. Thank you!

[winkosmosis]

Originally Posted by KathrynAragon

Here's the deal about property taxes - they are to some extent more controllable than other forms of taxation. That is to say, you can at least control where you choose to live and the value of the property you're considering.

Texas has no state income tax, so right there you're saving money in most cases. Then you have to consider just HOW MUCH HOUSE or property you can buy for how many dollars in Texas. In other words, if you need or want a larger home, you can usually buy more home for the buck in a low cost of living state like Texas. So...if you're spending $200,000 on a home that would cost you $500,000 somewhere else - then so what if your tax RATE is higher? What really matters is the final dollar amount at the end of the day, not the percentage.

I'll give you an example. My husband and I were considering moving to another state - a state that actually has a low cost of living (the Ozark region of Arkansas). Houses are cheap there - and property tax rates are EXTREMELY low. However - guess what. Arkansas has a state income tax. At the end of the day, if we bought a house comparable to the one we live in here in Texas (which would cost less there) AND our property taxes were several thousand dollars a year cheaper, it would STILL cost us about $7000 a year more to live there, because of the other taxes.

Here in northeast Texas, the homestead exemption does save us about $1000 a year. Beats a stick in the eye. But even more importantly, we're living in a comfortable home and paying no state income tax, so we're not complaining. Our property taxes, with the homestead exemption, do run about $5000 a year, which we don't enjoy paying. But the same house in, say, the northeast, would cost us triple what ours cost us. So we'd be paying, not only the property taxes (which would be higher, even though the tax rate is lower) but also the interest in a higher loan.

Hope that helps.

There's a great calculator on this forum's home page that can help you determine the cost of living differences between two locations. I highly recommend using it.

In order to pay $5000 income tax in Hawaii you'd have to be making about $100k... So while you think you're saving money due to the lack of income tax, you're not. Property tax is insanely high in Texas.

[Westerntraveler]

Winters in the Panhandle are anything but mild although it is a relative term.

[KathrynAragon]

Originally Posted by winkosmosis

In order to pay $5000 income tax in Hawaii you'd have to be making about $100k... So while you think you're saving money due to the lack of income tax, you're not. Property tax is insanely high in Texas.

I'm not talking about Hawaii, so I really don't know what you mean by this post.

[tamaralj]

Here is a site I've looked at that break down each county and the average property taxes. Seems like the far east side is cheaper.

Texas Property Taxes By County - 2014

[winkosmosis]

Originally Posted by KathrynAragon

I'm not talking about Hawaii, so I really don't know what you mean by this post.

You said that you're saving money compared to states with income tax. So yes, you were talking about Hawaii, a state with income tax and very low property tax. I'm trying to show you that your assumption about Texas having lower taxes isn't true, except for the super-rich. In Hawaii a middle class person pays less tax than in Texas

[High_Plains_Retired]

Originally Posted by tamaralj

Here is a site I've looked at that break down each county and the average property taxes. Seems like the far east side is cheaper.

Texas Property Taxes By County - 2014

I don't think I would trust that information except for rural properties. It seems to be based only the county rates and may not include significant taxes that can be included in the municipal rates. My family had a small home in town in Bailey County and our tax rate was more than twice what the data you found shows.

Also Bailey County assesses an annual county property tax on POVs less than ten years old. The tax can be quite expensive each year ($700 or more). However, this is probably not something to concern yourself with since only one or two Texas counties have that POV tax. I mention it only to demonstrate how property taxes between Texas counties can vary greatly when all factors beyond just the county rates are considered.

[winkosmosis]

Originally Posted by High_Plains_Retired

I don't think I would trust that information except for rural properties. It seems to be based only the county rates and may not include significant taxes that can be included in the municipal rates. My family had a small home in town in Bailey County and our tax rate was more than twice what the data you found shows.

Also Bailey County assesses an annual county property tax on POVs less than ten years old. The tax can be quite expensive each year ($700 or more). However, this is probably not something to concern yourself with since only one or two Texas counties have that POV tax. I mention it only to demonstrate how property taxes between Texas counties can vary greatly when all factors beyond just the county rates are considered.

It's amazing how difficult it is to find a straight property tax rate in Texas. They break it down into meaningless amounts that have no relevance to homeowners. Real estate websites take advantage of that to fudge numbers. Sometimes they even show values as low as 1.5%.

[High_Plains_Retired]

Originally Posted by winkosmosis

It's amazing how difficult it is to find a straight property tax rate in Texas. They break it down into meaningless amounts that have no relevance to homeowners. Real estate websites take advantage of that to fudge numbers. Sometimes they even show values as low as 1.5%.

From my experiences, one should never think that you can calculate your future tax bill on a Texas property from any information you can find online. For example, I've never found any official mention of the POV county property tax online that a few west Texas counties out here have. Additionally, a potential buyer of Texas property should always ask about any obscure local laws that may include municipal or county fees on certain uses of residential property such as if the residential property has RV rental spaces.

Unfortunately, I've found the only way to know what your total tax bill may be on a home you want to buy in Texas is to go to the tax office that has jurisdiction and ask them about that specific property. One should also ask what exemptions are currently on the property, then compare those with the ones you plan to have.

I've lived in four states and Texas definitely has the most complex property tax and fee system I've experienced.