What is a homestead?

In general, a homestead refers to certain property, such as a home or family residence, as defined by constitution or statute to be exempt from seizure or other forced sale. The amount and nature of the property that qualifies for the homestead exemption depends on whether it is rural or urban in nature. Homesteads may also be categorized depending on the purposes for which such property is used into either residential homesteads or business homesteads.

What type of property constitutes a rural homestead?

A rural homestead consists of property that is not located in a town or city. Under Texas statute, a rural homestead for a family is limited to not more than 200 acres of land, and a rural homestead for a single adult is limited to not more than 100 acres.

What type of property constitutes an urban homestead?

An urban homestead consists of property located in a town or city. Under Texas statute, an urban homestead may consist of not more than one acre of land.

What is the difference between a residential homestead and a business homestead?

A residential homestead usually consists of the family or individual’s residence, together with the real estate and improvements on which the residence is located. A business homestead is a part of an urban homestead where the property is used as a place of business by the family or individual. In other words, an urban homestead unit may consist of both property that is used for a home (the residential homestead) and for a place of business (the urban homestead). Even though a homestead may exist in a place of business and in a home (although both places may be on separate parcels of land), both the business homestead and the residential homestead must be in the same urban area.

What are the advantages to claiming a homestead exemption?

A homestead is protected from a forced sale to satisfy any debt except for those liens for purchase money, taxes due, or work and materials used in building improvements on the homestead (provided such work and material have been contracted for in writing).

How long does the homestead exemption exist?

Property continues to be a homestead until the existing homestead is abandoned or conveyed, until another homestead is acquired, or until the homestead claimant dies without being survived by family members who are entitled to the homestead exemption. A divorce where there are no children will terminate a family homestead.

Are there tax exemptions or benefits I can claim on my residential homestead if I am aged 65 or older?

In Texas, a taxpayer who is disabled or is 65 years or age or older may be entitled to a tax exemption of $10,000 of the appraised value of the residential homestead from a school district tax. Such taxpayer may also be entitled to a tax exemption of not less than $3,000 of the assessed value of the residential homestead. Plus, depending on the taxing authority, a taxpayer may also be entitled to an additional tax exemption of a percentage of the appraised value (at least $5,000 but not more than 20 percent of the appraised value) of the residential homestead.