Bought a Home Recently? Save $617 and File for Your Tax Exemptions Now!

Takeaways

• File for your homestead exemption.  Do it now. No excuses.
• There is a huge difference between 99% and 100% VA Disability.
• You can knock out many birds with one stone – filing for exemptions, updating your driver’s license, and registering to vote

After all the hard work of home searching, negotiating, inspecting, opening up your life to your lender, and signing a towering stack of closing documents, you finally have a home! It is a satisfying and exciting moment, and one to savor.

But sadly, life stops for no one, and there are quite a few more chores to attend to.  Transferring utilities, moving in, getting mailbox keys from the post office, changing the locks – all important items to do.  Add to that list: file for your property tax exemptions.

Note that these instructions apply to Bell County residents – Killeen, Harker Heights, Nolanville, Belton and Temple areas.  Copperas Cove and Gatesville are in Coryell County, and Kempner and Lampasas are in Lampasas County, and have different offices.

What are Property Tax Exemptions?

Texas has relatively high property taxes, due mostly to the absence of an income tax to collect revenue.  But the State has several exemptions for Texans who meet the criteria, and local municipalities can create their own exemption as well.

Your property tax will be collected once annually in October (your lender usually collects your estimated taxes as part of your mortgage and pays this for you).  The tax assessor assesses the tax value of your property once every year, beginning in January.  You will get a notice of the new assessed value usually around May, with a chance to appeal it.  Your property tax is your assessed value x the tax rate.  An example: The tax assessor assesses your property value at $120,000 in Killeen.  With a tax rate of 2.4695%, your annual taxes are $2963.40.

An exemption subtracts from the assessed value of your home ($120,000 in the example).  A homestead exemption, for example, is $25,000, meaning you would only be taxed on $95,000 in the example ($120,000 – $25,000 = $95,000).  That is $2346.03, a savings of $617 a year.  Note, a $25,000 exemption is not the same as $25,000 off your taxes.  It works out to just a several hundred dollars.  It may not seem like a huge savings, but keep reading to see the other benefits of filing for the different exemptions.

Do This As Soon As You’ve Bought Your Fort Hood Area Home

Update Your Driver’s License.  You will want to file for your homestead exemption right away if your home is your new primary residence. To do this, you will first have to update your driver’s license.

UPDATE YOUR DRIVER’S LICENSE

Updating your driver’s license with your new address is a Texas State requirement anyway (you are technically supposed to do this within 30 days of moving your primary residence).

What you’ll need to update your license:

• Old driver’s license
• $11
• (OPTIONAL) Proof of honorable discharge if applicable (DD-214, DD-215, NGB-22, VA Disability Letter, or Texas CHL letter w/ veteran designation)

The veteran status can save you the $11, and will have “VETERAN” printed on your license, which I assume is mostly only good for proving you are eligible for store discounts for veterans in lieu of a military ID, and improving your odds of escaping a traffic stop without a ticket.

The Driver’s License application will also ask if you would like to contribute $1 to a charity or two.

Finally, you can also simultaneously submit or update your voter registration while updating your driver’s license.  See?  Getting a lot done in just one trip!

Apply for Property Tax Exemptions.  Next, you will want to take your new driver’s license (the temporary paper will do just fine), and go right across the street from the DMV to the Bell County Annex.  This building houses the two local justices of the peace and their courtrooms, local precinct constables, and is also where you can pay your traffic tickets in person.  Pertinent to this discussion, it has the local tax assessor office where you can file for your property tax exemptions (the main Bell county offices are in the county seat in Belton, TX).

301 Priest Dr.
Killeen, TX  76541
(254) 634-9768

The tax office is in the very back, of the building.  This is very quick (much quicker than if you choose to go to the DMV in person), and there is a quick form to fill out, applying for your exemptions.  What you need to bring and which forms you will fill out depend on the exemptions you are applying for.  But the basic few items everyone will need is:

• Driver’s license with updated property address
• Social Security Numbers for all owners (i.e. including your spouse)

This article only covers exemptions in broad brushes, and if you have specific questions about your exemptions, this would be a good place to ask!

Homestead Exemption

The homestead exemption is a Texan invention (actually conceptualized and implemented by none other than Stephen F Austin).  Homestead Exemptions are available for every Texan’s primary residence, and therefore is one every homeowner should have at a minimum.  The property tax exemption is $25,000, for an annual savings in the Killeen area of about $617.

But “Homesteading” your property serves a far more important function than saving you a few bucks each year.  As originally designed, the most important feature is protection of your home against creditors.  If you go bankrupt, or must sell property to satisfy a legal judgement, your homestead property is exempt.  You can’t be forced out of your home.  Obviously, you can only have one homestead property at a time.

Obviously, there are some this does not apply to, like your mortgage and tax liens on your home.  You can’t stop paying the mortgage or property taxes.  You can get foreclosed in that case and forced out.

65+ and Disability Exemption

If you are 65 or have social security disability, you are also eligible for a $10,000 property tax exemption on top of the homestead exemption.  These are both mutually exclusive – meaning you only get one $10,000 exemption, even if you are both 65 or more years old and disabled.  The annual savings in Killeen is approximately $247.

But again, this exemption serves another more useful and more important purpose.  Many local municipalities have a tax ceiling put in place once you turn 65 and file for this exemption, preventing or limiting the amount your taxes can rise year to year.  That helps provide stability and security when planning life on a fixed income.

VA Disability Exemption

VA disability can be by far the largest type of tax exemption, though only if you have 100% VA disability.  Homeowners with 100% disability pay no property taxes.

A common misperception I run into is that, logically, someone with 90% disability doesn’t pay 90% of property taxes, right?  Still a great savings!  Unfortunately, no.  There are tax exemptions for anyone with at least 10% disability, but it is relatively minor amounts even as high as 99%.

The difference between a homeowner with 100% VA disability and one with none is immense.  Taxes are a significant portion of the mortgage payment.  Someone with 100% VA disability might pay, for example, $1017/mo for a $200,000 house.  Someone without that same disability would have a $1429/mo mortgage payment.

Note that unmarried surviving spouses inherit these benefits.

Example

The following example is for a $200,000 home in Killeen, TX, your annual tax savings would be:

Note that, except for the 100% VA Disability Exemption, the tax savings would be the same raw number for almost all homes, irrespective of the tax appraised value. (A $300,000 home and a $100,000 home still both get just a $25,000 exemption).

Local Property Taxes and Exemptions

Every municipality in Bell County has it’s own particular exemptions.  To see the exemptions for your area, visit the Bell County Tax Appraisal District website.

BELL COUNTY TAX APPRAISAL DISTRICT EXEMPTIONS

Conclusion

I hope you found this helpful!  Especially my buyers who have bought their homes in the last year, I will be sure to send this information to you!

Are you a homeowner and not sure if you filed your tax exemptions or not? Look up your address at the BellCAD website to see what your taxes are. And, if they look too high, contact me! I can do a market analysis and perhaps arm you with the tools to challenge your tax appraisal and get your taxes lowered.

If you haven’t bought yet and are still doing your research, please reach out to me! I would love to represent you through the buying process. Call or text me at (512) 763-7912 or email at brian@starpointerealty.com.

Contact Brian E Adams, Texas Realtor