Pay Close Attention to the Homestead Exemption When Refinancing

Real Estate Agent with JPAR Real Estate 486174


I think we all can agree, there is little NORMAL about the current real estate market. This is a most unusual situation regarding (I hope) a rare occurrence when refinancing your home.  In this case, the homeowner refinanced in July of 2020. The Homestead Exemption was REMOVED when the updated deed was filed with the County Taxing Authority. 


The situation was brought into the light four days before CLOSING (April 2021) by the Title Company, sending all parties to the transaction, scrambling. 

Let me add.  The market is Austin, Texas.  When the refinance took place in July of 2020, the homeowners had no intention of selling their fabulous home.  Along comes 2021 with one of the most aggressive Real Estate markets, with home prices surging and likely to outperform the national average by a long shot. 

The removal of the Homestead Exemption represents an increase of property taxes on this particular home by $6,000, throwing the buyers and sellers for an expensive loop. 

The odd part of this scenario, the Travis County Appraisal District program for our local MLS, indicated the Homestead Exemption IS INTACT.  

So what happened?  The owner of the home added her new husband to the deed, which requires filing A NEW HOMESTEAD EXEMPTION. The good news, the sellers are within the deadline to file another Homestead Exemption, but only by 12 days, with the deadline being April 30, 2021.   I am repeating myself, but closing is in 4 days.  Sadly, this plan will probably take a month (or so) to be implemented, so a conversation with the title company preparing the settlement statement is in order.

The solution to close, we will take the 2020 appraised value with the Homestead Exemption and add the 10% cap while the re-filing takes place. 

Take away, watch the filing process when you refinance, especially if someone is added to the deed. 

If you live in the Central Texas area, below you will find links to filing your Homestead Exemption and, if you qualify, your Over 65 Exemption.


Homestead Exemptions are Due by April 30th.

Homestead exemptions remove part of your home's value from taxation. If you want to receive a homestead exemption for the taxes on your home, the home must first qualify as a residence homestead on January 1 of the year in which you are applying.

There are two requirements:

  1. You must own your home on January 1. (If you are over 65, and/or disabled the January 1 ownership and residency are not required.)
  2. You must use the home as your principal residence on January 1.

A state law that took effect on September 1, 2011 has changed proof of residency requirements for homeowners applying for the property tax homestead exemption.

CLICK HERE for Texas Comptroller Information
Homestead Exemptions are due by April 30th


CLICK HERE for the Travis County Form

CLICK HERE for the Williamson County Form

CLICK HERE for the Hays County Form

CLICK HERE for a list of appraisal districts.

CLICK HERE to download application for "Residence Homestead Exemption Application Form".


Comments (3)

Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Great wisdom in this post hope sellers and buyers are reading, Endre

Apr 22, 2021 11:50 PM
Anne Edwards Johnson

@Endre Barath, Jr. Thank you for commenting.  I appreciate you.

Apr 23, 2021 07:05 PM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

This is important information for folks to know and understand, Anne.  It could make a lot of difference financially.

Apr 25, 2021 02:33 AM
Anne Edwards Johnson
JPAR Real Estate - Austin, TX
Austin Realtor | HookemhomesATX (512)917-5260

@Myrl Jeffcoat Thank you for the comment and stopping by. This could have been a very costly oversight had title not picked up on this situation, when they did. 


Apr 27, 2021 10:19 AM