Tim Dowling Owner/Broker

Did you know that the state of Texas has a section in the tax code that prevents you from being taxed out of the house if you so want to use it?  That is right if your 65 or older, you can defer your property taxes.  If your on a limited budget or just can’t meet your yearly property tax bill, you can defer the payments to a later day.  How does it work?  First you can click on this next link and go through a couple of pages of questions and answers  - Texas Property TaxBack TM   The link leads to Ehlers and Ehlers out of Houston and they have done a real nice job going into great detail about the code, the history along with the question and answer section.

The actual code can be read at Windows at State Government.

In my own words, here is the run down.  The section of the Texas Tax Code that covers this is Section 33.06 and it is titled Deferred Collection of Taxes on residential Homestead of Elderly or Disabled People.  If you or your spouse is over 65 and your having a hard time paying your bills or cutting back on your necessary medications or not providing yourself adequate meals on a daily basis, you have an answer.  Let us say that you pay $2,400 a year in property taxes and you have been in the house for 20 years and it is paid off and the house is worth $200,000, the house does not have to be paid off this is just the example, you could have an extra $200 a month to spend on essentials.  How it would work is you file the form(click the last link for the actual form) and read through, sign and return to the appraisal district that your home is located within.  I recommend talking to a CPA or attorney to understand how it would work and the appraisal district to see if you qualify.  I am not positive what the exact financial qualifer is, but if your barely making it, you will most likely qualify. 

How long do you defer the taxes?  You can defer them until all the way until you sell and no longer occupy the property.  The deferral payment is due 181 days after you leave the property and the proceeds of your home will pay this amount off.  Using the example above, if you were in the house for another 20 years the cost would have been $48,000 out of your pocket.  Now let us give the worst case scenario – You pass away and now the family will be selling the house.  The process is simple, there is a tax lien on the house and when the family sells the $48,000 is deducted by closing attorney or title company.  Left over is $152,000 that goes into your estate.  Why don’t more people take advantage of this code?  In my opinion, they just don’t know about it. 

Why starve or cut back on needed medications if there is an alternative?