If I rent the property I currently have homesteaded will I loose

8 Replies

If I currently own and live in a single family property that I have homesteaded and decide rent it and move into an apartment can I keep my SF house Homesteaded?

I am asking for a family member who lives in Dallas, Texas.

Thank you for your help!

Originally posted by @Andrew Ramler:

If I currently own and live in a single family property that I have homesteaded and decide rent it and move into an apartment can I keep my SF house Homesteaded?

I am asking for a family member who lives in Dallas, Texas.

Thank you for your help!

I am going to assume that each municipality is different - but here in my area the answer would be no. I recently had discussions about homestead and other exemptions with the county.

Based on what I have asked my local municipality about homestead and exemptions here in this area, the homestead is when you are occupying the property so if I were to move into an apartment that I do not own, I loose the homestead. 

However, if I were to leave the home, keep it and rent it out, and move to another home that I bought, I would apply for homestead on the 2nd property.

You can also contact your local municipality appraiser office and they can give you more accurate information based on your area. In my experience I have found the appraiser and tax office to be of great help.

Hope this helps.

No you cannot. There are also other implications of turning a primary residence into a rental. I am not a lawyer, but my understanding is that one your HUD (at closing) you state this will be your primary residence. Therefore, if you turn it into a rental, there must be a process to change this (refinance?). Also, filing homestead on a property you do not actually live in can be considered Fraud if the intent is there and can lead to hefty fines most likely. Better to play it safe. Besides, all additional costs (sans mortgage principal) can usually be treated as expenses against income.

From the comptroller site at texas.gov


Do all homes qualify for homestead exemptions?

No, only a homeowner's principal residence qualifies. To qualify, a home must meet the definition of a residence homestead: The home's owner must be an individual (for example: not a corporation or other business entity) and use the home as his or her principal residence on January 1 of the tax year. If you are age 65 or older, or disabled, the January 1 ownership and residency are not required for the age 65 or disabled homestead exemption.

Thank you @Daria B. , good thought on contacting the appraisal district. I will do just that and let you know what I find out for Dallas. 

@Account Closed , thanks for the response and the info on homestead. Just FYI, you can keep a primary mortgage(owner Occupied) if you turn it into a rental. I have done it multiple times and been total transparent with the mortgage companies. They currently live in the property and it is already homesteaded, the question is can the keep it if they move? 

@Andrew Ramler, You are correct. I was mistakenly assuming there was a FHA mortgage involved, in which case my understanding is you have to occupy the property 60 days after closing and can only convert to a rental after 1 year of living in it as a primary residence. My wife and I had an FHA home we converted to a Rental so we had to look into it further to make sure there were no legal ramifications.