Can I REMOVE my homestead?

[Courtney Timms]

I have an interesting property tax situation because of my house hacking situation. I bought a duplex in Texas in 2020. I live in side A so I filed for homestead. The county put a homestead on half of my property, but this also re-categorized my property to State Code: A1 instead of B2 for 2021. Category A is a single family residence while Category B is multifamily. They are appraising my duplex as two separate single family dwellings. 

The reason this is a concern is because now I cannot use my neighbors as comparable properties as they are listed as B2 properties. These properties which are almost identical to my property are valued at $100k or more less than my property. The only difference is that the owner is not living in one side of those properties like me. A homestead usually helps with lowering taxable value, but it's kind of screwing me over in this situation. Is it possible it remove a homestead exemption and is it a good idea in the long run?

[John Clark]

Quote from @Courtney Timms:

I have an interesting property tax situation because of my house hacking situation. I bought a duplex in Texas in 2020. I live in side A so I filed for homestead. The county put a homestead on half of my property, but this also re-categorized my property to State Code: A1 instead of B2 for 2021. Category A is a single family residence while Category B is multifamily. They are appraising my duplex as two separate single family dwellings. 

The reason this is a concern is because now I cannot use my neighbors as comparable properties as they are listed as B2 properties. These properties which are almost identical to my property are valued at $100k or more less than my property. The only difference is that the owner is not living in one side of those properties like me. A homestead usually helps with lowering taxable value, but it's kind of screwing me over in this situation. Is it possible it remove a homestead exemption and is it a good idea in the long run?

What do they say when you tell them that it’s a duplex and not separate buildings?

[Courtney Timms]

They told me the same thing that I found in 2022 Texas Property Tax Assistance Property Classification Guide. I could not find the the 2023 Guide.

Category B Classification Questions
Q. The owner of a duplex lives in one of the units. He
applies for and receives a homestead exemption
on the part of the duplex in which he resides. How
should I classify the duplex?
A. You should classify an owner-occupied duplex with a
residence homestead exemption as Category A.
Note: If the owner occupies one of the units in a triplex or
a fourplex, classify the property as Category B. Owneroccupancy
does not change the classification for triplexes
and fourplexes.

[Courtney Timms]

Quote from @John Clark:

Quote from @Courtney Timms:

I have an interesting property tax situation because of my house hacking situation. I bought a duplex in Texas in 2020. I live in side A so I filed for homestead. The county put a homestead on half of my property, but this also re-categorized my property to State Code: A1 instead of B2 for 2021. Category A is a single family residence while Category B is multifamily. They are appraising my duplex as two separate single family dwellings. 

The reason this is a concern is because now I cannot use my neighbors as comparable properties as they are listed as B2 properties. These properties which are almost identical to my property are valued at $100k or more less than my property. The only difference is that the owner is not living in one side of those properties like me. A homestead usually helps with lowering taxable value, but it's kind of screwing me over in this situation. Is it possible it remove a homestead exemption and is it a good idea in the long run?

What do they say when you tell them that it’s a duplex and not separate buildings?

They told me the same thing that I found in 2022 Texas Property Tax
Assistance Property Classification Guide. I could not find the the 2023
Guide.

Category B Classification Questions
Q. The owner of a duplex lives in one of the units. He
applies for and receives a homestead exemption
on the part of the duplex in which he resides. How
should I classify the duplex?
A. You should classify an owner-occupied duplex with a
residence homestead exemption as Category A.
Note: If the owner occupies one of the units in a triplex or
a fourplex, classify the property as Category B. Owneroccupancy
does not change the classification for triplexes
and fourplexes.

[John Clark]

Quote from @Courtney Timms:
They told me the same thing that I found in 2022 Texas Property Tax Assistance Property Classification Guide. I could not find the the 2023 Guide.

Category B Classification Questions
Q. The owner of a duplex lives in one of the units. He
applies for and receives a homestead exemption
on the part of the duplex in which he resides. How
should I classify the duplex?
A. You should classify an owner-occupied duplex with a
residence homestead exemption as Category A.
Note: If the owner occupies one of the units in a triplex or
a fourplex, classify the property as Category B. Owneroccupancy
does not change the classification for triplexes
and fourplexes.

First, contact the appropriate politicians to get the rules changed.

second, contest the results as irrational. Triplexes can be condos, so duplexes can be simple multi-units. Irrational to treat them as per se different.

[Matt Devincenzo]

Property taxation classification doesn't change the property type and applicable comps. If you have a duplex and you don't have it legally subdivided either as two separate lots, or as a condo then you cannot sell one apart from the other. It should not matter if they classify it as 'Barney the purple dinosaur' for taxes, the property's comparable sales are other two unit homes that will sell as two unit homes. Tax (and often even zoning) designation don't change the comps for what it physically exists as.

Is a residential appraiser telling you this, or are you basing this assessment only on your own understanding of these classifications? 

[Courtney Timms]

Quote from @Matt Devincenzo:

Property taxation classification doesn't change the property type and applicable comps. If you have a duplex and you don't have it legally subdivided either as two separate lots, or as a condo then you cannot sell one apart from the other. It should not matter if they classify it as 'Barney the purple dinosaur' for taxes, the property's comparable sales are other two unit homes that will sell as two unit homes. Tax (and often even zoning) designation don't change the comps for what it physically exists as.

Is a residential appraiser telling you this, or are you basing this assessment only on your own understanding of these classifications? 

Yes, what you are saying makes sense to me. Actually the people telling me I can’t use B2 comps is Tax Shield!  

[Courtney Timms]

Quote from @John Clark:

Quote from @Courtney Timms:
They told me the same thing that I found in 2022 Texas Property Tax Assistance Property Classification Guide. I could not find the the 2023 Guide.

Category B Classification Questions
Q. The owner of a duplex lives in one of the units. He
applies for and receives a homestead exemption
on the part of the duplex in which he resides. How
should I classify the duplex?
A. You should classify an owner-occupied duplex with a
residence homestead exemption as Category A.
Note: If the owner occupies one of the units in a triplex or
a fourplex, classify the property as Category B. Owneroccupancy
does not change the classification for triplexes
and fourplexes.

First, contact the appropriate politicians to get the rules changed.

second, contest the results as irrational. Triplexes can be condos, so duplexes can be simple multi-units. Irrational to treat them as per se different.

Agreed. I will try contesting.