Filing for Homestead of 1st property - Houston, TX

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Filing for Homestead of 1st property - Houston, TX

Alexander Timberlake
Houston, TX · Member since 2016 · 51 posts · 8 votes

Hello,

I recently bought my primary residence located in Houston, TX (Harris county) in February, 2016. I would like to claim this property as my homestead. I have learned that there are two main advantages:

1. I can write off a large percentage of my home value from property taxes if I file for the homestead exemption.

2. If I sell the home, I do not have to pay capital gains on the first $250k.

I have a few questions:

1. Are claiming a homestead and filing for the homestead exemption different?  

2. What is/are the correct form(s) to file for the homestead or claim the homestead exemption? (I see a document form 11.13 for Harris county that looks right, but I am not sure).

3. Will I be able to lower my tax basis for the 2016 tax year? The soonest I can file is Jan 1, 2017. I'm hoping that submitting a form on this date will be to lower my tax basis for the 2016 tax year (not the 2017 tax year)

4. Where do I submit these forms?

5. How can I check that these forms are received? How can I verify the property value basis that was used to calculate my property taxes?

Thank you!

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  • Dave Toelkes
    Investor · Pawleys Island, SC · Member since 2008 · 1k+ posts · 837 votes
    9y

    @Alexander Timberlake

    First, let me correct your perception of the advantages you listed.  You don't really write off any portion of your property value from your taxes.  Your tax basis for federal income tax purposes is unaffected by claiming homestead exemption.  Your state and county property taxes may be lower if you declare the property as your primary residence (homestead), but the value of your property is unchanged.  The tax assessor does not lower the value of your property when you claim the homestead exemption.  

    To claim the homestead exemption, call your county tax assessor or county treasurer's office and ask what you need to do to qualify for the homestead exemption.  Some taxing jurisdictions just require ownership and occupancy as your primary residence, but what they will accept as proof of your claim may vary.  In my home state of SC, all I had to do was present my drivers license with my birth date and residence address.  Since I did this in person, there was no form to fill out, the clerk just made a computer data entry.

    You may not have to wait until next year, but rather your homestead status may not be effective until next year.  Again, talk to your county taxing authorities to learn what to do and when to do it.

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  • Fred Heller
    Real Estate Agent/Property Management · Houston, TX · Member since 2014 · 1k+ posts · 827 votes
    9y

    @Alexander Timberlake  First of all you should absolutely apply for the homestead exemption for your personal residence. I believe you can do it online at the Harris County Tax Collector's web page. If you live in the property on January 1 you get the homestead exemption for that year.

    You can't "write off" a portion of your home's value. But the homestead exemption protects you from rapidly increasing property values. Let's say HCAD appraises your home at $100,000 more than last year (which is not uncommon in certain areas of Houston). The homestead exemption caps any increase in assessed value of your home at 10% of the previous year's assessment.

    The other advantage to the homestead exemption is that creditors can't force you to sell your home in the event of a bankruptcy. 

    As long as the home is your personal residence you can claim the exemption. Once you move out and treat it as a rental property you can no longer claim the exemption and will be subject to the whims of rising property values.

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  • Alexander Timberlake
    OP
    Houston, TX · Member since 2016 · 51 posts · 8 votes
    9y

    @Fred Heller Thanks for the information! I didn't move into until may of 2016. So it looks like the first year I will be able to file is for the 2017 tax year.

    Filing for the 2017 tax year is done in Jan 1, 2017 - April 30, 2017? Or is that window for the 2016 tax year?

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