Homestead for 21 units MF in Texas

10 Replies

Hi all, 

I have a 21 units which I am paying a lot of tax due to being in the middle of the city. Would it be possible to stay in one of the units and claim homestead on 21 units property? The property is currently held under LLC. I can change the legal structure to whatever it fits.

Account Closed

Welcome to Texas.  We have the best income tax rate in the country (0%), but one of the highest property tax rates in the country with anywhere from (2-3.5%).

Account Closed. YES - You can most likely get a Homestead Exemption for the ONE Unit you occupy. All the rest will be taxed at NON-Homestead Rates.  

I am actually not sure that you can claim part of a commercial property as your homestead.  However, taking a unit of of service to save $600-700 in property taxes seems like a bad decision

Account Closed is correct as it pertains to Texas as well. NO legal way around the Texas Homestead rules I'm aware of.
 

 

Originally posted by Account Closed:

@Jim Cummings The property is currently valued at 1.5m so I can only get around 70k for homestead. 

But if I were to live in 4 plex, I would be able to claim all on my tax right? I may be wrong. 

 No. Only on the unit you occupied .  Again, the savings is only $600-700 per year. The homestead does limit the property taxes rising to 10% per year but only on the homesteaders unit. So less than 5% of your value (1/21) is effected 

Account Closed

Hello, Houston neighbor. 

Here is a quote from the Texas Property Tax Code that confirms what other people stated (i.e. only your unit qualifies):

A qualified residential structure does not lose its character as a residence homestead if a portion of the structure is rented to another or is used primarily for other purposes that are incompatible with the owner's residential use of the structure. However, the amount of any residence homestead exemption does not apply to the value of that portion of the structure that is used primarily for purposes that are incompatible with the owner's residential use.