Specialist · Austin, TX · Member since 2015 · 56 posts · 46 votes
9y
A homestead exemption is most often only on a fixed monetary amount, such as the first $50,000 of the assessed value. The remainder is taxed at the normal rate. In that case, a home valued at $150,000 would then only be taxed on $100,000; a home valued at $75,000 would be taxed only on $25,000.
The exemption is generally intended to make the property tax a progressive tax. In some places, the exemption is paid for with a local or state (or equivalent unit)sales tax.
Specialist · Austin, TX · Member since 2015 · 56 posts · 46 votes
9y
Chance, the taxes would increase because you are no longer filing the homestead exemption which offers a property tax break. I am facing the same issue on my primary residence next summer when I begin renting it. The exact amount of the increase will vary based on your city/county, but in general that is why absentee owners pay more property taxes.
It is not uncommon for your primary residence to receive discounted property taxes (often referred to as a "homestead" discount/rebate/rate/exemption) - in some places it s different rate; others a portion of the tax is either not levied on owner-occupied property or is refunded to the tax-payer.
Here our residential property tax has two components, municipal and provincial. On an owner-occupied primary residence the provincial portion of the level is credited back to the tax payer ... effectively making the property tax paid about half of the full rate.
Specialist · Austin, TX · Member since 2015 · 56 posts · 46 votes
9y
A homestead exemption is most often only on a fixed monetary amount, such as the first $50,000 of the assessed value. The remainder is taxed at the normal rate. In that case, a home valued at $150,000 would then only be taxed on $100,000; a home valued at $75,000 would be taxed only on $25,000.
The exemption is generally intended to make the property tax a progressive tax. In some places, the exemption is paid for with a local or state (or equivalent unit)sales tax.
I just looked at both of my neighbors tax payments and they pay roughly $200 a year. I am paying $1200 a year!
Chance, the reason your neighbor is paying so much less is they likely bought the property some time back and since taxes are "re-assessed" at the time of sale, it is not uncommon that if they've held the property for a number of years, they likely haven't had the taxes re-assessed in some time