Understanding Texas Property Tax Deferment Options

If you’re over the age of 65, you have likely heard that you are eligible to defer your property taxes. For some, this is the best course of action, but no option is right for everyone. In this blog, the Home Tax Solutions team reviews some of the basics on Texas property tax deferrals. If you want to learn more about this repayment option, you can contact your county appraisal district or the tax assessor collector’s office. They will provide you with all of the forms and deadlines to meet your county’s specific requirements.  

What is a Property Tax Deferment?

For those over the age of 65 and those who meet the Social Security Administration definition of disabled, a special Homestead Exemption is available. This exemption decreases the amount of your appraised home value that is assessed for property taxes, making it possible for many homeowners to fit their property taxes into their budgets. Most county tax offices require homeowners to file for Homestead Exemption prior to completing the application for deferral. 

If you are still unable to repay delinquent or current property taxes after the Homestead Exemptions are applied, you can file for property tax deferral. These deferrals allow you to postpone the repayment of your property taxes as long as you are living in your home. It is not necessary to repay these taxes until the home is sold or the applicant is no longer the homeowner. However, any assessed penalties and fees on back property taxes remain in effect on deferred taxes. Additionally, an 8% per year interest rate is assessed on the amount owed.  

Who is Eligible? 

Tax deferment may be an option for homeowners who are:

  • 65 or older
  • Disabled (as defined by law)
  • Disabled veterans (as defined by law) or their unmarried surviving spouses or unmarried children under the age of 18 if there is no surviving spouse
  • An unmarried surviving spouse or unmarried child under the age of 18 of an armed service member killed on active duty
  • Living in a home with a greater than 5% increase in appraisal value from one year to the next (this deferral has limitations)

A person with a disability will need to meet the requirements for disability set by the Social Security Administration, which states that the person must have a medically determinable mental or physical impairment that prevents the person from engaging in gainful employment. This disability should be expected to last at least 12 months or until the person’s life has ended.  

The 5% appraisal value does not apply to homes that have had significant improvements. If your home property value increases more than 5% in one year without significant changes or renovations, you must pay all taxes up to 5% of increased overall value. Property taxes on the remaining amount of increase can be deferred and repaid with similar terms to traditional deferrals. 

How Do I Apply for Deferral? 

To apply for a deferral, you will need to complete one or more of the following forms found in your county tax assessor collector’s office: 

  • Application for Homestead Exemptions (required by most county tax offices prior to filing for deferral)
  • Affidavit of Disability (Social Security Administration Disability determination letter and/or Physician’s Statement Verifying Eligibility for Disability Exemption)
  • Over-65 and Disabled Tax Deferral Affidavit 
  • Tax Deferral Affidavit for Appreciating Residence Homestead Value 
  • Appraisal Increase Deferral Affidavit (with verification from tax office regarding legal maximum deferral amounts)

I Deferred My Loan & I’m Still Not Able to Pay it Back in Full – Can You Help? 

In some cases, we may be able to help. As soon as your home is sold or changes ownership, the deferred property taxes are due within 180 days. In most cases, the deferred taxes are covered by the sale price of the home. If this is not the case, you inherit a home with deferred taxes, or you want to avoid deferment altogether, our team members can help you understand your repayment options. With five locations across the state of Texas, there’s a Home Tax Solutions team near you. Learning more about repayment of deferred property taxes or how to get out of the home tax debt cycle is easy. Simply complete our online form or give one of our offices a call. We’re here to help!