Local Optional Homestead Exemption

Over the course of the next few weeks, I would like to share further information about the district finances and how they are calculated. One of the things that often gets overlooked in the process, is the fact that Eustace ISD is still one of the few districts in the state that offers a local optional homestead exemption to the taxpayers of the district. A total of 192 school districts in the state (out of a listing of 1,019 provided by the comptroller’s office) offer a local optional homestead exemption. Of the 192 that offer the local exemption, 151 offer a 20% exemption. Eustace ISD is one of the districts that offers a 20% exemption. Twenty percent is the largest percentage offered by school districts.

How does the local optional homestead exemption work? It is easier to see the benefit of the local exemption by looking at an example. Let’s look at the difference between taxes owed on a $100,000 home without the local exemption and then with the local exemption.

The state provides an exemption of $25,000 for each homestead (that is up in recent years from $15,000).  If there were no local exemption, the taxes owed on a $100,000 home would be calculated as follows:

$100,000 – $25,000 (state exemption) = $75,000

$75,000 ÷ 100 x $1.23(EISD’s current tax rate) = $922.50

The value is divided by 100 because the tax is calculated on the value per hundred.

Now, with the local optional homestead exemption, the tax owed on the same $100,000 home is calculated as follows:

$100, 000 x 20%(local exemption percent) = $20,000

$100,000 – $20,000 (local exemption) = $80,000

$80,000 – $25,000 (state exemption) = $55,000

$55,000 ÷ 100 x $1.23 = $676.50

So, a resident of Eustace ISD, with a home valued at $100,000 would save $246.00 in taxes because of the local optional homestead exemption.

As always, if you have any questions regarding the local homestead exemption, or any other aspect of the district, please feel free to contact me at cholombe@eustaceisd.net.


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