Last fall, there was a change to Texas law that is a great tax break for active duty homeowners who have to leave their Texas property. Texas Senate Bill 833 amended a previous law to allow Texas residents who own houses in Texas and have a valid homestead exemption to maintain that exemption if they have to leave their Texas property due to PCS orders to another state. What a boon!
A homestead exemption is a tax break on real estate taxes. Each state has its own way of doing a homestead exemption, and the rules for who can benefit from a homestead exemption vary from state to state. In most states, you must physically occupy the house to claim the exemption.
Under the old law, Texas residents who had to leave their Texas home due to PCS orders were only permitted to continue to receive the homestead exemption if they were stationed outside the United States. However, Senate Bill 833, passed in June 2015, changed the wording of the bill to also include PCS moves to locations within the United States.
Texas is a popular state for military families to establish residence because of its high rate of enlistment, large military presence, and favorable tax situation. For those military members who purchase homes while stationed in Texas, this change will create yet another incentive to maintain Texas as their state of legal residence.
Reports of actual experiences show that many of the local taxing authorities don’t know about this change to the law. If you’re a Texas resident who owns property in Texas and is stationed elsewhere, look into whether you are still receiving the homestead exemption. It can save you some serious cash! Some people say that you shouldn’t draw attention to yourself if you are still receiving the exemption, but I think it is more prudent (and ethical) to be pro-active and substantiate why you should continue to receive the exemption. You may want to print out a copy of the bill in case there is any confusion about what the law says.
If you keep up with the proper documentation, you may find that this law could decrease your real property tax bill. What a great thing!