The Common Law

As last week's "Common Law" column discussed, the Texas Homestead Exemption is designed to prevent the seizure and forced sale of the homestead property from certain creditors. The homestead exemption provides extra legal protection because general creditors would not be able to force you to sell your home in order to satisfy an unpaid debt. In addition, another big advantage to obtaining a homestead exemption, is that it can help you save money on your property tax bill. A homestead exemption reduces taxes by lowering a home's taxable value.

But first you have to determine whether the property you move into can qualify as your homestead. An individual may receive only one homestead exemption, and not all homes qualify for it. The homeowner must be an individual (homestead exemption is not offered to a corporate or business entity). The homeowner must both own the home and use the home as the primary residence on Jan. 1 of the year he or she wishes to seek the exemption.

The law is flexible on the type of home that can qualify for a homestead exemption. For example, someone can file for and obtain a homestead exemption for a separate structure home, condominium, urban loft, or mobile home. The key component is that the person living in the home owns it and uses it as his or her primary residence. Texas law limits the homestead exemption to 10 acres inside city limits ("urban homestead") and 100 acres in rural areas ("rural homestead"), which is doubled to 200 acres when a family uses the property as its permanent residence. Unlike many other states, however, Texas' homestead exemption has no limit on the dollar value of the protected homestead.

Anyone interested in establishing a Texas Homestead Exemption can download the application form (www.window.state.tx.us/taxinfo/taxforms/50-114.pdf) and send it in to their county appraisal office.