Property Tax Justice

Property Tax Exemptions - 101

The easiest way to reduce your property taxes is to exempt some of your property from taxation.

Texas property owners may apply for several tax exemptions by printing, completing and mailing forms available from this site. You can also get an application by telephone at (512) 834-9317.

There is no charge to apply. Do not: pay anyone to file the application.

Homestead Exemption requirements are simple:

• own the property on January 1
• reside in it as your primary residence
• claim no other homestead exemption

Over-65 age home buyers qualify immediately for a prorata share of their homestead exemption, rather than waiting to the next January 1, and their school "tax freeze" is now "transportable" from home to home.

Senior citizen homeowners also qualify for a tax "deferment" whereby they can quit paying property taxes at all as long as they reside in their homestead. Drawback: the taxes still accrue along with huge penalties and interest which become payable when the homeowner vacates.

Special additional homestead exemptions are available to veteran and Social Security disabled homeowners, though of surprisingly little actual value in tax savings.

Both the city of Austin and Austin ISD grant substantial "historical" exemptions to owners of properties designated as historically significant. The exemption amounts vary, but usually the taxes on 25-50% of land value and 50-100% of the building value is abated. Contact Barbara Stocklin at (512) 499-2414 for information.

Commercial property owners can also take advantage of the "historical" exemption, it is the only tax break available to reduce their tax burden.

Business owners are subject to property taxes on their equipment, furniture, trade fixtures and inventory. An annual "rendition" is required from every business so that Travis CAD can establish a taxable value for their assets.

Many businesses fail to submit a "rendition" and are over-assessed as a result. There is no legal penalty for not rendering, but the reality is that TCAD must place a value on the tax roll and they rarely guess low.

Two additional tactics useful to business owners are the "Freeport" exemption and selection of the "inventory valuation date." Businesses may be entitled to exempt the cost of goods shipped out of Texas via a "Freeport" exemption. See the Travis CAD website for qualifications and application forms.

Businesses may opt for their inventory value to be determined as of January 1 or September 1 of each year. This can dramatically affect the inventory value assigned to seasonal or holiday-related businesses who may have unusually large inventories on hand at year end, but substantially less on September 1.

Agricultural property owners may pay taxes only on the "productive" value or their land, rather than the "market" value. This exempts up to 99% of the property tax liability and is the only way most farmers and ranchers can keep their property.

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