Are you going to qualify for HOMESTEAD TAX EXEMPTION?

If you have looked to buy a home in the state of TEXAS you have probably heard the term "Homestead Exemption".

What exactly is a Homestead Exemption?  Well, it is a portion of your property that is not counted in the calculation of your tax bill. The state defines this as : The home's owner must be an individual (for example: not a corporation or other business entity) and use the home as his or her principal residence on January 1 of the tax year.

So just how does this impact the home buyer this time of year to early next year?   By closing on your home prior to December 29th this year (the 30th and 31st are weekends when title companies are closed), you can qualify for the Homestead Exemption for 2007 instead of having to wait until 2008 to apply for it.

So by buying a home before the end of the year, you'll reap two significant money benefits.  The first is the one that most people are familiar with and that  has to do with your income tax...you'll need to consult your CPA on that impact.  The second is a savings that will be in relation to the value of the property.  For example, a home that is assessed by the tax collector at being a $350,000 home would be treated as being valued at 20% less for tax purposes.   So if your average tax bill is 3.5%,  your savings would be around $2500 for the year's taxes in 2007!  

So if you are teetering on buying now before the year ends and buying in the first month or two of next year, it might be beneficial to make that home purchase now!