Why Do A Homestead Exemption

Why Do A Homestead Exemption

When you buy a new home, one option you have is to claim that home as your homestead. But why do it? There are a couple of good reasons. Filing a homestead exemption reduces your tax obligation, lowering your tax bill. Usually the first $25,000 in home value is exempted so on a $200,000 home, you would only pay taxes on $175,000. The effective tax rate for the city of San Antonio this year is 54.266 cents per $100 valuation. But with school districts and other taxing authorities, most people pay around $1.60 per $100 valuation. So if you take $25,000 reduction, divided by $100 and multiply by $1.60, that means you save $400.

But Wait, There’s More

Filing for your homestead also allows you to protect your home from property taxes and creditors following the death of a spouse. It is meant to provide a shelter for the surviving spouse so the home can’t be seized. It also provides varying degrees of protection from a forced sale by creditors. Some laws only protect up to a certain amount of value or acreage, but most homes are protected.

Things To Note

1. You can only have one homestead.

2. It begins the first full year of ownership.

3. You have to file for it.

4. It’s free. Don’t pay someone to do it for you. New homeowners will often receive offers from companies offering to file on their behalf, for a fee, and they make it look official. But there is no charge to file. Just go to the Bexar County Appraisal District’s website and download the application. Here’s the link: https://bcad.org/index.php/Forms