Three common tax exemptions that will help you save more money.

How much do you know about tax exemptions? Today, I’m sharing critical information about some of the most common tax exemptions.

1. Homestead exemption. This is applicable in Texas and some other states like Florida. This exemption allows you to reduce your taxes on your primary residence, where you reside for at least six months of the year. If you own multiple homes, the exemption applies to the one you occupy for the majority of the time. For properties with acreage, the homestead exemption is typically only applicable to one acre where your house is located.

“Each exemption has its own specific requirements.”

2. Senior exemption. This is available to individuals who are 65 years old or older, or married couples where one spouse is 65 or older. You can apply for this exemption the year before you turn 65, and once granted, it freezes your school tax, which is often the largest portion of your property tax bill. Unlike some states that fund schools through other means, such as travel and entertainment or state income tax, Texas relies heavily on property taxes.

3. Agricultural and wildlife exemptions. This covers various agricultural activities such as hay production, cattle raising, goat or sheep farming, dairy production, and beekeeping. Different counties have varying criteria based on the number of animals or units for these exemptions. This variation is due to the diverse ecosystems across Texas, which consists of approximately 12 different climate regions. The amount of rainfall and availability of crops in each area determine the number of animals that can be sustained. In contrast, the wildlife exemption is a separate category with its own specific requirements.

Also, when purchasing property, it’s essential to be aware of whether any of these exemptions are already in place or if you need to apply for them. Each county has its own rules regarding the minimum acreage required and whether it must be contiguous with neighboring properties. Additionally, if you don’t personally engage in agricultural activities, you may still be able to arrange for someone else to use your land for grazing in exchange for the associated tax credit.

If you have any further questions or would like more information about tax exemptions or anything real estate related, call or email me. I’m always happy to help.