Title 1. Property Tax Code
Subtitle C. Taxable Property and Exemptions
Chapter 11. Taxable Property and Exemptions
Subchapter B. Exemptions.
Sec. 11.11. Public Property.
Sec. 11.111. Public Property Used to Provide Transitional Housing for Indigent Persons.
Sec. 11.12. Federal Exemptions.
Sec. 11.13. Residence Homestead.
Sec. 11.14. Tangible Personal Property Not Producing Income.
Sec. 11.142. Repealed in 2003.
Sec. 11.145. Income Producing Tangible Personal Property Having Value Less than $500.
Sec. 11.146. Mineral Interest Having Value of Less than $500.
Sec. 11.15. Family Supplies.
Sec. 11.16. Farm Products.
Sec. 11.161. Implements of Husbandry.
Sec. 11.17. Cemeteries.
Sec. 11.18. Charitable Organizations.
Sec. 11.1801. Charity Care and Community Benefits Requirements for Charitable Hospital.
Sec. 11.181. Charitable Organizations Improving Property for Low-Income Housing.
Sec. 11.182. Community Housing Development Organizations Improving Property for Low-Income and Moderate-Income Housing: Property Previously Exempt.
Sec. 11.1825. Organizations Constructing or Rehabilitating Low-Income Housing: Property Not Previously Exempt.
Sec. 11.1826. Monitoring of Compliance With Low-Income and Moderate-Income Housing Exemptions.
Sec. 11.183. Association Providing Assistance to Ambulatory Health Care Centers.
Sec. 11.184. Organizations Engaged Primarily in Performing Charitable Functions.
Sec. 11.185. Colonia Model Subdivision Program.
Sec. 11.19. Youth Spiritual, Mental, and Physical Development Associations.
Sec. 11.20. Religious Organizations.
Sec. 11.201. Additional Tax on Sale of Certain Religious Organization Property.
Sec. 11.21. Schools.
Sec. 11.22. Disabled Veterans.
Sec. 11.23. Miscellaneous Exemptions.
Sec. 11.24. Historic Sites.
Sec. 11.25. Marine Cargo Containers Used Exclusively in International Commerce.
Sec. 11.251. Tangible Personal Property Exempt.
Sec. 11.252. Motor Vehicles Leased for Personal Use.
Sec. 11.26. Limitation of School Tax on Homesteads of Elderly or Disabled.
Sec. 11.261. Limitation of County, Municipal, or Junior College District Tax on Homesteads of Disabled and Elderly.
Sec. 11.27. Solar and Wind-Powered Energy Devices.
Sec. 11.271. Offshore Drilling Equipment Not in Use.
Sec. 11.28. Property Exempted from City Taxation by Agreement.
Sec. 11.29. Intracoastal Waterway Dredge Disposal Site.
Sec. 11.30. Nonprofit Water Supply or Wastewater Service Corporation.
Sec. 11.31. Pollution Control Property.
Sec. 11.32. Certain Water Conservation Initiatives.
Sec. 11.33. Raw Cocoa and Green Coffee Held in Harris County.
[Sections 11.34 to 11.40 reserved for expansion]
(a) Except as provided by Subsections (b) and (c) of this section, property owned by this state or a political subdivision of this state is exempt from taxation if the property is used for public purposes.
(b) Land owned by the Permanent University Fund is taxable for county purposes. Any notice required by Section 25.19 of this code shall be sent to the comptroller, and the comptroller shall appear in behalf of the state in any protest or appeal relating to taxation of Permanent University Fund land.
(c) Agricultural or grazing land owned by a county for the benefit of public schools under Article VII, Section 6, of the Texas Constitution is taxable for all purposes. The county shall pay the taxes on the land from the revenue derived from the land. If revenue from the land is insufficient to pay the taxes, the county shall pay the balance from the county general fund.
(d) Property owned by the state that is not used for public purposes is taxable. Property owned by a state agency or institution is not used for public purposes if the property is rented or leased for compensation to a private business enterprise to be used by it for a purpose not related to the performance of the duties and functions of the state agency or institution or used to provide private residential housing for compensation to members of the public other than students and employees of the state agency or institution owning the property, unless the residential use is secondary to its use by an educational institution primarily for instructional purposes. Any notice required by Section 25.19 of this code shall be sent to the agency or institution that owns the property, and it shall appear in behalf of the state in any protest or appeal related to taxation of the property.
(e) Property that is held or dedicated for the support, maintenance, or benefit of an institution of higher education as defined by Section 61.003, Education Code, but is not rented or leased for compensation to a private business enterprise to be used by it for a purpose not related to the performance of the duties and functions of the state or institution or is not rented or leased to provide private residential housing to members of the public other than students and employees of the state or institution is not taxable. If a portion of property of an institution of higher education is used for public purposes and a portion is not used for those purposes, the portion of the property used for public purposes is exempt under this subsection. All oil, gas, and other mineral interests owned by an institution of higher education are exempt from all ad valorem taxes. Property bequeathed to an institution is exempt from the assessment of ad valorem taxes from the date of the decedent's death, unless:
(1) the property is leased for compensation to a private business enterprise as provided in this subsection; or
(2) the transfer of the property to an institution is contested in a probate court, in which case ad valorem taxes shall be assessed to the estate of the decedent until the final determination of the disposition of the property is made. The property is exempt from the assessment of ad valorem taxes upon vesting of the property in the institution.
(f) Property of a higher education development foundation or an alumni association that is located on land owned by the state for the support, maintenance, or benefit of an institution of higher education as defined in Chapter 61, Education Code, is exempt from taxation if:
(1) the foundation or organization meets the requirements of Sections 11.18(e) and (f) and is organized exclusively to operate programs or perform other activities for the benefit of institutions of higher education; and
(2) the property is used exclusively in those programs or activities.
(g) For purposes of this section, an improvement is owned by the state and is used for public purposes if it is:
(1) located on land owned by the Texas Department of Corrections;
(2) leased and used by the department; and
(3) subject to a lease-purchase agreement providing that legal title to the improvement passes to the department at the end of the lease period.
(h) For purposes of this section, tangible personal property is owned by this state or a political subdivision of this state if it is subject to a lease-purchase agreement providing that the state or political subdivision, as applicable, is entitled to compel delivery of the legal title to the property to the state or political subdivision, as applicable, at the end of the lease term. The property ceases to be owned by the state or political subdivision, as applicable, if, not later than the 30th day after the date the lease terminates, the state or political subdivision, as applicable, does not exercise its right to acquire legal title to the property.
(i) A corporation organized under the Texas Non-Profit Corporation Act (Article 1396 1.01 et seq., Vernon's Texas Civil Statutes) that engages exclusively in providing chilled water and steam to an eligible institution, as defined by Section 301.031, Health and Safety Code, is entitled to an exemption from taxation of the property the corporation owns as though the property of the corporation were owned by this state and used for health or educational purposes.
(j) For purposes of this section, any portion of a facility owned by the Texas Department of Transportation that is part of the Trans-Texas Corridor, is a rail facility or system, or is a highway in the state highway system, and that is licensed or leased to a private entity by that department under Chapter 91, 223, or 227, Transportation Code, is public property used for a public purpose if the rail facility or system, highway, or facility is operated by the private entity to provide transportation or utility services. Any part of a facility, rail facility or system, or state highway that is licensed or leased to a private entity for a commercial purpose is not exempt from taxation.
Added by cts 1979, 66th Leg., p. 2234, ch. 841, § 1, eff. Jan. 1, 1980. Amended by Acts 1981, 67th Leg., 1st C.S., p. 127, ch. 13, § 30, eff. Jan. 1, 1984; Acts 1983, 68th Leg., p. 4821, ch. 851, § 5, eff. Aug. 29, 1983; Acts 1983, 68th Leg., p. 5419, ch. 1007, § 1, eff. Jan. 1, 1984; Acts 1989, 71st Leg., ch. 796, § 14, eff. Jan. 1, 1990; Acts 1989, 71st Leg., ch. 1021, § 1, eff. Aug. 28, 1989; Acts 1990, 71st Leg., 6th C.S., ch. 12, § 2(31), eff. Sept. 6, 1990; Acts 1991, 72nd Leg., 2nd C.S., ch. 6, § 9, eff. Sept. 1, 1991; Acts 1997, 75th Leg., ch. 843, § 1, eff. Jan. 1, 1998; Acts 2001, 77th Leg., ch. 362, § 1, eff. May 26, 2001; Acts 2003, 78th Leg., ch. 1266, § 1.01, eff. June 20, 2003; Acts 2005, 79th Leg., ch. 281, § 2.95, eff. June 14, 2005.
Public property for public purposes, see art. VIII, Sec. 2 & art. IX, Sec. 9, Tex. Const.
County taxation of university lands, see art. VII, Sec. 16, Tex. Const.
Taxation of school lands, see art. VII, Sec. 6b, Tex. Const.
No application required, see Sec. 11.43(a).
Exemption effective immediately on qualification, see Sec. 11.42(b).
Proration of taxes where property is acquired by a governmental body, see Sec. 26.11.
Administration of exemptions generally, see Secs. 11.41 - 11.47.
Economic development corporation exemption, see Sec. 32, Art. 5190.6, V.A.C.S.
Housing finance corporation exemption, see Sec. 394.905, Local Government Code.
Article XI, Sec. 9, Tex. Const., applies only to property exclusively owned by a public entity, free of any kind of legal or equitable ownership. Satterlee v. Gulf Coast Waste Disposal Authority, 576 S.W.2d 773 (Tex. 1978).
Article VIII, Sec. 1, Tex. Const., requires taxation of "all property . . . whether owned by natural persons or corporations, other than municipal." Under a statute exempting all property owned by the state or a political subdivision regardless of use, city property leased to a private business is exempt from taxation. City of Beaumont v. Fertitta, 415 S.W.2d 902 (Tex. 1967).
Article VIII, Sec. 2, Tex. Const., which permits the legislature to exempt "public property used for public purposes," allows an exemption only for publicly owned property. Leander Independent School District v. Cedar Park Water Supply Corp., 479 S.W.2d 908 (Tex. 1972).
Article IX, Sec. 9, Tex. Const., which exempts ". . . property devoted to the use and benefit of the public," exempts publicly owned property used for public purposes. Lower Colorado River Authority v. Chemical Bank & Trust Co., 190 S.W.2d 48 (Tex. 1945).
Rural electrification lines owned by a home rule city outside its limits and within the boundaries of an independent school district were exempt from ad valorem taxation as public property used for public purposes. The test for "public purpose" is whether it is used primarily for health, comfort and welfare of the public. Incidental use of the property to generate revenue is permissible if the proceeds are used for the benefit of the public. A & M Consolidated Independent School District v. City of Bryan, 184 S.W.2d 914 (Tex. 1945).
Where a lease agreement unambiguously provides that legal title to improvements to be built on city owned land is to be held by the city, the improvements are considered owned by the city for purposes of taxation. The fact the lessee my hold a leasehold interest in the improvement does not mean it necessarily holds equitable title to the improvements. Travis Cent. Appraisal Dist. v. Signature Flight Support Corp., 140 S.W.3d 833 (Tex. App.- Austin 2004, no pet.).
Based on the trial court's actions following the 2001 remand of the property owner's claims (see 52 S.W.2d 795), the taxpayer reasserted a claim of exemption under Article XI, Section 9 of the Texas Constitution. The Court granted the appraisal district's jurisdictional plea based on the taxpayer's failure to exhaust its administrative remedies through protest. The claimed exemption was not automatic or self-operative due to the provisions of Sections 23.13 and 25.07 concerning taxable leaseholds and possessory interests. The taxpayer was not the owner of the land and improvement for which a public property exemption applied. Therefore, the taxpayer was required to conform to the Tax Code administrative requirements. Wackenhut Corrections Corp. v. Bexar Appraisal District, 100 S.W.3d 289 (Tex. App.-San Antonio 2002, no pet.).
State-owned property leased for private commercial use was not a public purpose for which an exemption applied. The lease was therefore subsumed by the fee estate and must be appraised accordingly. Land owned by the University of Texas and the State of Texas would be tax exempt as publicly owned land, but lost the exempt status because of private commercial use, resulting in an appraisal at market value of the fee simple estate. Gables Realty Limited Partnership v. Travis Central Appraisal District, 81 S.W.3d 869 (Tex. App.-Austin 2002, pet. denied).
Section 25.25(d) does not provide for the appeal of the denial of an exemption. Taxpayer failed to timely file a protest under Chapter 41. Bexar Appraisal District v. Wackenhut Corrections Corporation, 52 S.W.3d 795 (Tex. App.-San Antonio 2001, no pet.).
Use of public property for public purposes must be exclusive for exemption as public property. A separate non-profit foundation that held legal title to a building and parking lot was affiliated with a public university that used 80 percent of the building and 33 percent of the parking lot. The foundation was denied the exemption because the foundation was not a public entity and because there was no existing written agreement between the foundation and the university allowing transfer of title to the university. Hays County Appraisal District v. Southwest Texas State University, 973 S.W.2d 419 (Tex. App.-Austin 1998).
The public property used for public purpose exemption is not lost when a county does not participate in the appraisal proceedings. Three counties did not lose their tax exemption when the counties did not challenge the property tax appraisal of a juvenile detention facility. While Tax Code Section 42.09 is the exclusive procedure for appealing a property tax appraisal, it does not bar the exemption granted political subdivisions by Article XI, Section 9, Texas Constitution. Sweetwater ISD v. ReCor, Inc., 955 S.W.2d 703 (Tex. App.-- Eastland 1997).
The burden of taxation falls on the owner of equitable title. The Texas Department of Corrections (TDC) held equitable title to improvements built and owned by a private corporation, but to which TDC would acquire full legal title when its "lease" payments were made. This property, used as a prison, was exempt as public property used for a public purpose. Texas Department of Corrections v. Anderson County Appraisal District, 834 S.W.2d 130 (Tex. App.-Tyler 1992, writ denied).
Acts taken by a political subdivision to maintain its own existence are acts for a public purpose. Property held by a political subdivision solely for resale is exempt from property taxation. Klein Independent School District v. Harris County Appraisal Review Board, et. al., 843 S.W.2d 201 (Tex. App.-Texarkana 1992, no writ).
A medical office building owned by a hospital district and partially leased to private doctors conducting their own practices was not exclusively used for the use and benefit of the public and not entitled to tax exempt status under this section. Enactment of this section repealed hospital exemption set out in art. 4437e, Sec. 16, VTCS. Grand Prairie Hospital Authority v. Dallas CAD, 730 S.W.2d 849 (Tex. App.-Dallas 1987, writ ref'd n.r.e.).
Property owned by a hospital authority with a portion leased to private doctors for their own commercial enterprise was not used exclusively for the use and benefit of the public and was not exempt as public property. A hospital authority must exhaust its procedural administrative remedies under the Tax Code before seeking judicial review. Grand Prairie Hospital Authority v. Tarrant Appraisal District, 707 S.W.2d 281 (Tex. App.-Fort Worth 1986, writ ref'd n.r.e.).
Public roads owned by the county are exempt from taxation whereas a privately owned road, although platted and recorded as being subject to a public easement, is taxable. Once accepted by the government the road becomes tax exempt, however. Op. Tex. Att'y Gen. No. GA-0139 (2004).Foreclosed property held by the Veterans' Land Board, under mortgages issued from its funds, is exempt from property taxation. Holding such property for resale to replenish its funds is a public purpose. Op. Tex. Att'y Gen. No. GA-0026 (2003).
A building owned and operated by a hospital authority, but leased in part to a private business for operation as a "long-term care hospital," must satisfy the exclusive public use requirement to qualify for property tax exemption under Texas Constitution Article VIII, Section 2. To satisfy the exclusive public use requirement, the leased space must be used exclusively "for the health, comfort, and welfare of the public" served by the authority's hospital. Whether the proposed use of the leased space as a privately operated long-term care hospital satisfies the exclusive public use requirement necessitates investigation and resolution of facts. If the leased space is not used exclusively for public purposes, the authority would be liable under the law for taxes against the building. Op. Tex. Att'y Gen. No. JC-0571 (2002).
A building owned by Karnes County Hospital District but leased to physicians for their private medical practice is not exempt from property taxes. Private commercial use of publicly owned property destroys its tax-exempt status. Op. Tex. Att'y Gen. No. JC-311 (2000).
Whether the Karnes County Correctional Center is exempt as provided by Section 11.11 was a question of fact to be determined. It must be determined if the correctional center is publicly owned and used for a public purpose. Letter Op. Tex. Att'y Gen. No. DM-98-028 (1998).
State-owned land used for public purposes and exempt under Tax Code Section 11.11 is not subject to the agricultural use rollback tax in Tax Code Section 23.55. Opinion No. JM-949 (1988) held that acquisition alone does not trigger the rollback tax provisions. The rollback tax process is triggered when a change of use occurs from an agricultural use to a nonagricultural use. No Texas courts have addressed directly the rollback tax provision with regard to the state acquiring and changing a qualified land's use. The opinion disagreed with the State Property Tax Board's position in its 1990 rule for the Manual for the Appraisal of Agricultural Land that governmental acquisition and change of use of qualified agricultural land triggered the rollback provisions. Op. Tex. Att'y Gen. No. DM-448 (1997).
Airport property leased by the state to a private entity may be exempt from property taxes if the use is in direct support of the state's operation of the airport. A particular leased facility would be exempt from property taxes depending on the fact questions of the lease. Op. Tex. Att'y Gen. No. DM-436 (1997).
University-owned property will meet the public purpose test only if it is used for education purposes. State institutions of higher education have authority to undertake a wide variety of activities that are not strictly educational but that support the education mission of the university. University property operated not for education purposes but as an amusement park to generate income is not property used for a public purpose. However, the courts might find for a public purpose if continuing the operation of the amusement park for a short term was necessary while phasing in education activities. Op. Tex. Att'y Gen. No. DM-429 (1996).
A court must examine a specific contract's facts to determine if a jail facility that a county leases under a lease-purchase agreement from a private entity is subject to property taxes. A court likely would consider whether the county held equitable title to the jail facility and whether the county may compel the lessor to convey the property's legal title if the county meets all contract conditions. Op. Tex. Att'y Gen. No. DM-383 (1996).
The Rotary House, "a patient housing center," providing temporary accommodations for M.D. Anderson Cancer Center patients, their families and guests of the University of Texas, is public property used for a public purpose. Op. Tex. Att'y Gen. No. DM-272 (1993).
Contraband seized by peace officers pursuant to Chapter 59 of the Code of Criminal Procedure is exempt from taxation as public property. The property serves a public purpose because it can be used by law enforcement agencies for official purposes, or sold, with proceeds either deposited in the state treasury's general revenue fund or used for law enforcement purposes. Op. Tex. Att'y Gen. No. DM-187 (1992).
Contraband seized by peace officers pursuant to Chapter 59 of the Code of Criminal Procedure becomes tax-exempt from the time the state acquires title. Tax-exempt status applies as long as the property is owned by the state and used for public purposes. Id.
As a matter of law, the holdings in the cases of Grand Prairie Hosp. Auth. v. Tarrant Appraisal Dist. and Grand Prairie Hosp. Auth. v. Dallas County Appraisal Dist. do not prescribe that the LCRA's mineral interests are subject to taxation. If the LCRA holds its working interests in oil and gas wells exclusively for the public's benefit and use, the interests are exempt from ad valorem taxation. Op. Tex. Att'y Gen. No. DM-78 (1992).
A municipal airport hangar used to support the safe and efficient operation of the airport is exempt from taxation under Sections 11.11 and 25.05. However, when most of the aircraft stored and serviced at the hangar will be brought there solely for purposes of maintenance and storage and will not be used for transportation to and from the airport, the property is not exempt because it is not used exclusively for the benefit of the public. Public property used by private entities is tax-exempt if the private use is a public purpose or is in direct support of a public purpose. Property owned by a public entity and leased purely for private commercial use is not exempt. If a city owns buildings purely for the purpose of leasing them to private commercial interests, the buildings are not exempt. Putting the property to a constructive use pending its sale and depositing the proceeds to the credit of the public fund used to purchase the property does not deprive the property of its public purpose. Temporary rental of property owned by a city does not remove a tax exemption if the purpose for which the property was originally acquired was a public purpose and the city did not abandon this purpose when it leased the property for private use. Section 11.11(e), Tax Code, governs residences leased by a junior college to employees or students of the institution for private residential housing to non-students or persons not employed by the institution are not tax-exempt. Op. Tex. Att'y Gen. No. DM-188 (1992).
Property owned by a trust and used exclusively for the benefit of a state university was exempt from ad valorem taxation under Sec. 11.11(e). Op. Tex. Att'y Gen. No. JM-551 (1986).
A city is not exempt from ad valorem taxation on city-owned land surrounding an airport where such land is leased for commercial and agricultural purposes. Op. Tex. Att'y Gen. No. JM-464 (1986).
The fact that a hospital district receives remuneration for leasing a building owned by that district will not deprive that district of tax-exempt status on such property. Op. Tex. Att'y Gen. No. JM-405 (1985).
Concession rights in state parks were possessory interests taxable to the interest holder under Sec. 25.07 and not exempt under Sec. 11.11. Op. Tex. Att'y Gen. No. JM-59 (1983).
Offices in a hospital district's office building are taxable if sold under a condominium arrangement. Op. Tex. Att'y Gen. No. MW-430 (1981).
Housing provided by the state for its employees was used as a form of compensation and therefore used for public purposes. Op. Tex. Att'y Gen. No. MW-391 (1981).
(a) The governing body of a taxing unit by ordinance or order may exempt from ad valorem taxation residential property owned by the United States or an agency of the United States and used to provide transitional housing for the indigent under a program operated or directed by the United States Department of Housing and Urban Development.
(b) For purposes of this section, transitional housing for indigent individuals is housing provided at no cost or nominal cost to an indigent individual or family during a temporary period in which the individual or a member of the family participates in a job training program, job placement program, or other program intended to assist the individual or family to become self-sufficient.
(c) The exemption provided by this section applies even if the United States or its agency leases the property to a nonprofit organization in return for the organization's assistance in operating the program to provide transitional housing, as long as the lease does not require the nonprofit organization to pay more than a nominal amount to lease the property.
Added by 1991 Tex. Laws, p. 2710, ch. 762, Sec. 13.
Annual application required, see Sec. 11.43(b).
Exemption application form, see Rule Sec. 9.415.
Property exempt from ad valorem taxation by federal law is exempt from taxation.
Acts 1979, 66th Leg., p. 2234, ch. 841, §1, eff. Jan. 1, 1980.
No application required, see Sec. 11.43(a).
Jurisdiction to tax, see Sec. 11.01.
Interstate allocation, see Sec. 21.03.
Allocation of vessels and other watercraft, see Secs. 21.021 & 21.031.
Foreign trade zones constitute foreign and, hence, interstate commerce, so they are in the purview of U. S. Congress. Imposing local property taxes on the property in foreign trade zones would affect interstate and foreign commerce, and forbidding such taxes would provide uniform treatment of foreign trade zones throughout the country. The exemption from local property taxes does not violate the Tenth Amendment nor the Guarantee Clause of the U. S. Constitution. Deer Park Independent School District et al. v. Harris County Appraisal District et al, 132 F.3d 1095 (U.S. 5th Cir. 1998, petition denied).
Rule in Harris Co. v. Xerox (below) does not apply to goods in a customs warehouse bound for domestic distribution. These goods can be taxed. R.J. Reynolds v. Durham County, N.C., 107 S.Ct. 499 (1986).
Goods stored in a U.S. customs warehouse under customs bond could not be taxed by the city of Houston. The U.S. Congress created these duty-free zones as part of a comprehensive scheme to encourage use of American ports as centers for goods in foreign trade. State property taxes on goods located within the area were pre-empted by action of Congress. Harris County v. Xerox Corp., 103 S.Ct. 523 (1982).
As a general rule, property of the federal government is not taxable unless it is being used by a private party. In that instance, as with property of the state and its political subdivisions, the possessory interest of the private party is taxable. See United States v. County of Fresno, 429 U.S. 452, 50 L.Ed.2d 683, 97 S.Ct. 699 (1977).
Congress has the sole authority to determine whether and to what extent its agencies are immune from state taxation, and any waiver of immunity is strictly construed. Reconstruction Finance Corp. v. State of Texas, 229 F.2d 9 (5th Cir. 1956), cert. denied, 76 S.Ct. 695, 351 U.S. 907, 100 L.Ed. 1442 (1956).
An exporter that detains goods in a warehouse while awaiting overseas export is entitled to a property tax exemption under the Commerce Clause and the Equal Protection Clause of the United States Constitution. Taxation would prevent the federal government from speaking with one voice in its regulation of commercial relations with foreign governments. Vinmar, Inc. v. Harris County Appraisal District, 947 S.W.2d 554 (Tex. 1997).
Even though property owned by private persons contained leasehold interests of a federal entity, the appraisal district must appraise lessors' property at its full fee simple value. Leaseholds held by the Postal Service were not exempt from taxation because their value did not affect the value of the fee simple, which already included the value of any leasehold interests. Dallas Central Appraisal Dist. v. United States Postal Service, 866 S.W.2d 209 (Tex. 1993).
An exempt organization must narrowly define the recipients of the organization's dissolved assets to insure that they fit within the Property Tax Code's delineated list of exempt entities. Failure to do so allowed the appraisal district to deny exempt status to the organization, thereby allowing the organization's land to be taxed. Since there is no federal law preemption of this Code requirement, the appraisal district could legally deny the exemption. Mission Palms Retirement Housing, Inc. v. Hidalgo County Appraisal District, 896 S.W.2d 819 (Tex. App.-Corpus Christi 1995, no writ).
(a) A family or single adult is entitled to an exemption from taxation for the county purposes authorized in Article VIII, Section 1-a, of the Texas Constitution of $3,000 of the assessed value of his residence homestead.
(b) An adult is entitled to exemption from taxation by a school district of $15,000 of the appraised value of the adult's residence homestead, except that $10,000 of the exemption does not apply to an entity operating under former Chapter 17, 18, 25, 26, 27, or 28, Education Code, as those chapters existed on May 1, 1995, as permitted by Section 11.301, Education Code.
(c) In addition to the exemption provided by Subsection (b) of this section, an adult who is disabled or is 65 or older is entitled to an exemption from taxation by a school district of $10,000 of the appraised value of his residence homestead.
(d) In addition to the exemptions provided by Subsections (b) and (c) of this section, an individual who is disabled or is 65 or older is entitled to an exemption from taxation by a taxing unit of a portion (the amount of which is fixed as provided by Subsection (e) of this section) of the appraised value of his residence homestead if the exemption is adopted either:
(1) by the governing body of the taxing unit; or
(2) by a favorable vote of a majority of the qualified voters of the taxing unit at an election called by the governing body of a taxing unit, and the governing body shall call the election on the petition of at least 20 percent of the number of qualified voters who voted in the preceding election of the taxing unit.
(e) The amount of an exemption adopted as provided by Subsection (d) of this section is $3,000 of the appraised value of the residence homestead unless a larger amount is specified by:
(1) the governing body authorizing the exemption if the exemption is authorized as provided by Subdivision (1) of Subsection (d) of this section; or
(2) the petition for the election if the exemption is authorized as provided by Subdivision (2) of Subsection (d) of this section.
(f) Once authorized, an exemption adopted as provided by Subsection (d) of this section may be repealed or decreased or increased in amount by the governing body of the taxing unit or by the procedure authorized by Subdivision (2) of Subsection (d) of this section. In the case of a decrease, the amount of the exemption may not be reduced to less than $3,000 of the market value.
(g) If the residence homestead exemption provided by Subsection (d) of this section is adopted by a county that levies a tax for the county purposes authorized by Article VIII, Section 1 a, of the Texas Constitution, the residence homestead exemptions provided by Subsections (a) and (d) of this section may not be aggregated for the county tax purposes. An individual who is eligible for both exemptions is entitled to take only the exemption authorized as provided by Subsection (d) of this section for purposes of that county tax.
(h) Joint, community, or successive owners may not each receive the same exemption provided by or pursuant to this section for the same residence homestead in the same year. An eligible disabled person who is 65 or older may not receive both a disabled and an elderly residence homestead exemption but may choose either. A person may not receive an exemption under this section for more than one residence homestead in the same year.
(i) The assessor and collector for a taxing unit may disregard the exemptions authorized by Subsection (b), (c), (d), or (n) of this section and assess and collect a tax pledged for payment of debt without deducting the amount of the exemption if:
(1) prior to adoption of the exemption, the unit pledged the taxes for the payment of a debt; and
(2) granting the exemption would impair the obligation of the contract creating the debt.
(j) For purposes of this section:
(1) "Residence homestead" means a structure (including a mobile home) or a separately secured and occupied portion of a structure (together with the land, not to exceed 20 acres, and improvements used in the residential occupancy of the structure, if the structure and the land and improvements have identical ownership) that:
(A) is owned by one or more individuals, either directly or through a beneficial interest in a qualifying trust;
(B) is designed or adapted for human residence;
(C) is used as a residence; and
(D) is occupied as his principal residence by an owner or, for property owned through a beneficial interest in a qualifying trust, by a trustor of the trust who qualifies for the exemption.
(2) "Trustor" means a person who transfers an interest in residential property to a qualifying trust, whether by deed or by will, or the person's spouse.
(3) "Qualifying trust" means a trust:
(A) in which the agreement, will, or court order creating the trust provides that the trustor of the trust or the beneficiary of the trust if created by court order has the right to use and occupy as the trustor's or beneficiary's principal residence residential property rent free and without charge except for taxes and other costs and expenses specified in the instrument or court order:
(i) for life;
(ii) for the lesser of life or a term of years; or
(iii) until the date the trust is revoked or terminated by an instrument or court order that describes the property with sufficient certainty to identify it and is recorded in the real property records of the county in which the property is located; and
(B) that acquires the property in an instrument of title or under a court order that:
(i) describes the property with sufficient certainty to identify it and the interest acquired;
(ii) is recorded in the real property records of the county in which the property is located; and
(iii) in the case of a trust that is not created by court order, is executed by the trustor or the personal representative of the trustor.
(k) A qualified residential structure does not lose its character as a residence homestead if a portion of the structure is rented to another or is used primarily for other purposes that are incompatible with the owner's residential use of the structure. However, the amount of any residence homestead exemption does not apply to the value of that portion of the structure that is used primarily for purposes that are incompatible with the owner's residential use.
(l) A qualified residential structure does not lose its character as a residence homestead when the owner who qualifies for the exemption temporarily stops occupying it as a principal residence if that owner does not establish a different principal residence and the absence is:
(1) for a period of less than two years and the owner intends to return and occupy the structure as the owner's principal residence; or
(2) caused by the owner's:
(A) military service outside of the United States as a member of the armed forces of the United States or of this state; or
(B) residency in a facility that provides services related to health, infirmity, or aging.
(m) In this section:
(1) "Disabled" means under a disability for purposes of payment of disability insurance benefits under Federal Old-Age, Survivors, and Disability Insurance.
(2) "School district" means a political subdivision organized to provide general elementary and secondary public education. "School district" does not include a junior college district or a political subdivision organized to provide special education services.
(n) In addition to any other exemptions provided by this section, an individual is entitled to an exemption from taxation by a taxing unit of a percentage of the appraised value of his residence homestead if the exemption is adopted by the governing body of the taxing unit before July 1 in the manner provided by law for official action by the body. If the percentage set by the taxing unit produces an exemption in a tax year of less than $5,000 when applied to a particular residence homestead, the individual is entitled to an exemption of $5,000 of the appraised value. The percentage adopted by the taxing unit may not exceed 20 percent.
(o) For purposes of this section, a residence homestead also may consist of an interest in real property created through ownership of stock in a corporation incorporated under the Cooperative Association Act (Article 1396 50.01, Vernon's Texas Civil Statutes) to provide dwelling places to its stockholders if:
(1) the interests of the stockholders of the corporation are appraised separately as provided by Section 23.19 of this code in the tax year to which the exemption applies;
(2) ownership of the stock entitles the owner to occupy a dwelling place owned by the corporation;
(3) the dwelling place is a structure or a separately secured and occupied portion of a structure; and
(4) the dwelling place is occupied as his principal residence by a stockholder who qualifies for the exemption.
(p) Exemption under this section for a homestead described by Subsection (o) of this section extends only to the dwelling place occupied as a residence homestead and to a portion of the total common area used in the residential occupancy that is equal to the percentage of the total amount of the stock issued by the corporation that is owned by the homestead claimant. The size of a residence homestead under Subsection (o) of this section, including any relevant portion of common area, may not exceed 20 acres.
(q) The surviving spouse of an individual who qualifies for an exemption under Subsection (d) for the residence homestead of a person 65 or older is entitled to an exemption for the same property from the same taxing unit in an amount equal to that of the exemption for which the deceased spouse qualified if:
(1) the deceased spouse died in a year in which the deceased spouse qualified for the exemption;
(2) the surviving spouse was 55 or older when the deceased spouse died; and
(3) the property was the residence homestead of the surviving spouse when the deceased spouse died and remains the residence homestead of the surviving spouse.
(r) An individual who receives an exemption under Subsection (d) is not entitled to an exemption under Subsection (q).
(s) Expired January 1, 1999.
Added by Acts 1979, 66th Leg., p. 2234, ch. 841, § 1, eff. Jan. 1, 1980. Amended by Acts 1981, 67th Leg., 1st C.S., p. 127, ch. 13, § 31, eff. Jan. 1, 1982; Acts 1983, 68th Leg., p. 4822, ch. 851, § 6, eff. Aug. 29, 1983; Acts 1985, 69th Leg., ch. 301, § 1, eff. June 7, 1985; Acts 1987, 70th Leg., ch. 547, § 1, eff. Jan. 1, 1988; Acts 1991, 72nd Leg., ch. 20, § 18, eff. Aug. 26, 1991; Acts 1991, 72nd Leg., ch. 20, § 19(a), eff. Jan. 1, 1992; Acts 1991, 72nd Leg., ch. 391, § 14; Acts 1993, 73rd Leg., ch. 347, § 4.08, eff. May 31, 1993; Acts 1993, 73rd Leg., ch. 854, § 1, eff. Jan. 1, 1994; Acts 1995, 74th Leg., ch. 76, § 15.01, eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 610, § 1, eff. Jan. 1, 1996; Acts 1997, 75th Leg., ch. 194, § 1, eff. Jan. 1, 1998; Acts 1997, 75th Leg., ch. 592, § 2.01; Acts 1997, 75th Leg., ch. 1039, § 6, eff. Jan. 1, 1998; Acts 1997, 75th Leg., ch. 1059, § 2, eff. June 19, 1997; Acts 1997, 75th Leg., ch. 1071, § 28, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1199, § 1, eff. June 18, 1999; Acts 1999, 76th Leg., ch. 1481, § 1, eff. Jan. 1, 2000; Acts 2003, 78th Leg., ch. 240, § 1, eff. June 18, 2003; Acts 2005, 79th Leg., ch. 159, § 1, eff. Jan. 1, 2006.
Annual application not required, see Sec. 11.43(c).
Late application for homestead exemption, see Sec. 11.431.
Partial ownership, see Sec. 11.41.
School tax ceiling on homesteads of elderly, see Sec. 11.26.
Abatement of delinquent tax suits on homesteads of elderly, see Sec. 33.06.
Installment payments for certain homesteads, see Secs. 31.031 and 31.032.
Deferral of tax increase for a value increase exceeding 105 percent, see Sec. 33.065.
Exemption application form, see Rule Sec. 9.415.
Prorating taxes for elderly exemption granted after January 1, see Sec. 26.112.
Qualification date for homestead exemptions, see Sec. 11.42.
Separate appraisal of cooperative housing, see Sec. 23.19.
Termination of elderly homestead exemption, see Sec. 26.10.
Constitutional authorization, see art. VIII, Sec. 1-b, Tex. Const.
Consolidated school districts, see Sec. 41.008, Education Code.
The Tax Injunction Act bars injunctive or declaratory relief for state tax matters in federal court unless the state fails to have a speedy and efficient remedy for a taxpayer's claim. Texas courts have such a remedy, and taxpayers could not seek injunctive remedy for taxes assessed on their homesteads for improperly granted exemptions to previous owners of the homes. Hamilton v. Dallas Central Appraisal District, No. 3:98-CV-2553-L (N. D. Tex. 1999).
The chief appraiser has the responsibility to correct appraisal rolls for erroneously granted homestead exemptions. A tax lien is created based on back appraisal, even though the party who benefited from the erroneously granted exemption had sold the property. The liens would be extinguished, however, if tax certificates were issued at the time of the property transfer. Dallas Central Appraisal District v. Wang, 82 S.W.3d 697 (Tex. App.-Dallas 2002, pet. denied).
Taxpayer purchased a residence in 1992 but did not record the deed or apply for a homestead exemption. Appraisal district continued to appraise property as a homestead under the prior owner's homestead application. Appraisal district discovered the transfer and terminated the prior owner's exemption in 1997. Taxpayer submitted a homestead application in 1998. Appraisal district denied the homestead exemption in 1993 through 1996. Appraisal district properly denied the homestead exemption for 1993 through 1996. Purchasers of residences must reapply for a homestead exemption. The homestead exemption for a prior owner terminates upon conveyance of the property. Appraisal district may remove erroneous exemptions if discovered within five years. A taxpayer may file a homestead exemption application up to one year late. An appraisal district can only be held to the requirements of Section 25.19(g) if put on notice of a transfer of property. Dallas Central Appraisal District and Dallas County Appraisal Review Board v. Brown, 19 S.W.3d 878 (Tex. App.-Dallas [5th Dist.] 2000, no pet.).
A property owner had two years to redeem foreclosed property if property was the owner's homestead. The owner could meet the homestead requirements under Section 11.13 by occupying the property as a principal residence or having the property owned through a beneficial interest in a qualifying trust by a trustor who qualified for the exemption. The legislative intent is to allow an owner who occupies a homestead an additional period of time to redeem that homestead. The mere failure to actually file an exemption application would deprive the owner of the right to redeem his homestead. Nichols v. Lincoln Trust Company, 8 S.W.3d 346 (Tex. App.-Amarillo 1999, no pet.).
A spouse with a legal life estate is an owner of the property for property tax purposes and entitled to claim a homestead exemption. The Tax Code requires the property to be listed in the name of the life tenant. Copeland v. Tarrant Appraisal District, 906 S.W.2d 148 (Tex. App.-Fort Worth 1995, writ denied).
Where a residence homestead was the separate property of the under-65 husband, the over-65 wife could not qualify for the over-65 exemption, even though the property was her homestead for other constitutional purposes. Under the statute, the qualified person must be an owner of the residence. Ripley v. Stephens, 686 S.W.2d 757 (Tex. App.-Austin 1985, writ ref'd n.r.e.).
The amendment to Section 11.13(l) defining the temporary period for which an owner of residential property can stop occupying a residence and maintain the homestead exemption was held to apply for Tax Year 2004 and subsequent years. Op. Tex. Att'y Gen. No. GA-0148 (2004).
A residence homeowner's rental of a part of the residence to another person disqualifies that part of the home from homestead exemptions. This rental provision does not apply when the homeowner rents the entire residence to another and is absent from the residence homestead. Rental of the entire property would be merely one aspect; among others to consider in determining exempt status are whether the owner's absence is temporary, whether the owner has established a different principal residence, and whether the owner intends to return and occupy the property as the principal residence. Rental of the entire property, by itself, does not change the residence-homestead status for homestead exemptions under Tax Code Section 11.13. Several definitions for terms used in Tax Code Section 11.13 are: "principal residence" is the owner's primary or chief residence that the owner actually occupies on a regular basis; "temporary" refers to a limited or short absence of the owner from the residence homestead. What constitutes a 'temporary' period of absence from the residence homestead necessarily depends on the particular circumstances: the length of the home owner's absence and whether the home owner has established another principal residence and whether the owner intends to return and occupy the residence as his or her principal residence. The length of the period probably is less important than the establishment of a different principal residence and the owner's intent to return and occupy the residence as a principal residence. Op. Tex. Att'y Gen. No. JC-415 (2001).
A blind person under the age of 55 who is engaged in substantial gainful activity is not under a disability for purposes of payment of disability insurance benefits under the Federal Old-Age, Survivors, and Disability Insurance, and is therefore not entitled to a homestead exemption under Property Tax Code Section 11.13(c) and (d). Tex. Att'y Gen. LO-95-060 (1995).
All homestead exemptions are to be adopted by the actions of a taxing unit's governing body, not through an election ballot voted on by the taxpayers. Op. Tex. Att'y. Gen. No. DM-312 (1994).
A taxing unit does not have to offer the optional homestead exemption set forth in art. 8, Sec. 1-b, Tex. Const., to both the elderly and the disabled, but may choose either one or both. Op. Tex. Att'y Gen. No. JM-829 (1987).
Neither the residence owned by a corporation, nor the corporate stock owned by persons who live in cooperative housing is entitled to the residence homestead tax exemption or to the protection afforded homesteads exempt from forced sale for debt. Op. Tex. Att'y Gen. No. JM-612 (1986). (Note: Sec. 11.13(o) permits owners of cooperative housing to receive a residential homestead exemption beginning January 1, 1988.)
A chief appraiser cannot arbitrarily limit the amount of land granted a homestead exemption to less than the maximum 20 acres specified in Subsection (j). The amount of land must be determined on a case-by-case basis according to its actual use. Op. Tex. Att'y Gen. No. JM-40 (1983).
The exemption application deadline in Sec. 11.43 does not apply to local option over-65 exemptions granted under art. VIII, Sec. 1-b of the Texas Constitution. Op. Tex. Att'y Gen. No. MW-146 (1980). However, in a later opinion in the same year, the attorney general said a taxpayer could wait so long that granting his exemption would be administratively impracticable. Op. Tex. Att'y Gen. No. MW-259 (1980). (Note: These opinions preceded the addition of Sec. 11.431 to the Property Tax Code.)