move homestead exemption from SFH to a "house hack" quadplex?

6 Replies

I'm moving into 1 unit of a quadplex that I'm purchasing via a pocket listing, closing this week.

Is it better for me to leave the homestead exemption on my SFH (appraised at $225k) or move it to the new quadplex (appraised at $425k) as of 2017.

I'm thinking i should leave it on the SFH that has a higher valuation, as I will only get the HS exemption on 1/4 of the quad, correct? This would be the best fiscal decision as far as I can tell, but looking for confirmation.

Follow up questions - Will the county reappraise the new quad right away? Can they find out sales price from a pocket listing if its not on MLS?

This is travis county, texas.

@Bill McCasky I think you are thinking about this correctly. I would have the homestead exemption applied to the higher taxable basis. In this case it sounds like your 4-plex.

In my area the tax accessor is not going to look at sales as much as they are going to look at comparable properties. They typically re-asses the properties every 2-3 years in my neck of the woods.

@Bill McCasky

> I'm moving into 1 unit of a quadplex that I'm purchasing via a pocket listing, closing this week.

Just be forewarned that, per my understanding at least, if you file Homestead for the SFH and you do not intend to live there, that is considered fraud. I could be slightly incorrect, but you may want to talk to someone who is more knowledgeable on the subject and who can also address your risks and likelihood of actually getting caught.

Larry Hawkins is correct. You can not file for a homestead exemption if that you do not reside in that home. So if you are going to live in your 4-plex you would have to forgo filing your SFR as a homestead. In addition to that you can only claim a homestead exemption for 1 address and only for the portion of the structure you are residing in. If you click this hyperlink it will download the Texas Property Tax Exemptions book from the Comptroller's website, page 3 explains the exemption clearly. 

But this is definitely a question for a tax lawyer or maybe a CPA. Feel free to PM me for my CPA's information. You may want to ask @Scott Smith as well, he's a great lawyer that works exclusively with Investors to help them protect their assets. 

Hi Bill,
I'm a Sr. Property Tax Consultant licensed in Texas. The appraisal districts have access to mls, but it would be difficult for them to pick up the sales price if not listed.
They do have a pretty good system of finding your new homestead, change of driver's license address is enough to trigger sometimes.
One thing to note is tax code allows them to go back and charge 5 years if they become aware homestead is on wrong house.

Appraisals are done early in the year and you'll get the tax bill for 2018 sometime in the spring. At least that's how Harris County does it. I'm guessing Travis is similar.

Believe you will only receive proportional HS exemption on the 4plex because you are only assumed to be occupying 1/4 of the property.....

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