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Roger
Roger, Lawyer
Category: Real Estate Law
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Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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I own (mortgaged) 43 acres. My loan covers the land and my

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I own (mortgaged) 43 acres. My loan covers the land and my small house/barn etc. I am going to build another home very close to the current house. It will also have a mortgage on it, most likely rolled into the existing one or re-done altogether, depending on my bankers position. The current small home will eventually become a bed/breakfast as a part of my retirement business. My in-laws, also want to build a home on the property re-surveyed and sold to them, with my (and the bankers) approval and blessing . My question (and I know a more detailed version should be discussed); is: When I do this, should I re-homestead my new house including the acreage, or leave it as is and make the new one a "guest house"....

Kirk Adams :

Hi - my name is Kirk. Thanks for your post.

Kirk Adams :

If your new home is going to be larger and more valuable, you're better off to claim homestead on it and not claim homestead on the smaller house.

Kirk Adams :

Also, your best option would likely be to take your new home and the surrounding 1-2 acres and have the tax collector make that property your homestead property and then take the remaining property and the small house another parcel and tax it separately.

Kirk Adams :

Under Texas law, your homestead can include up to 20 acres if the land is used as your yard.

Kirk Adams :

So, you may want to claim as much of the property as you can around the new home as your "yard" and take the exemption of that. Then, you could take the other acreage and smaller house and pay regular taxes (non-homestead) on that.

Customer:

So I'm currently only getting the exemption on a maximum of 20 acres?

Kirk Adams :

Here's a good link from the Texas Comptroler's Office that outlines real property exemptions under Texas law: http://www.window.state.tx.us/taxinfo/proptax/tx96_295_00/home00.html

Customer:

that is most likely what I've looked for and not found.

Kirk Adams :

YES, Texas only allows a homestead claim for the house and UP TO 20 acres - - if it is used as your yard. Thus, you would likely need to consult with your local tax office to see what exactly your exemption is for currently. It may be that you don't even have the 20 acres exempt - - depending on how they have your land assessed.

Customer:

Ok,

Customer:

Thanks,

Kirk Adams :

No problem.

Roger and 2 other Real Estate Law Specialists are ready to help you
Hi - thanks for allowing me to assist you. If the need arises, I'll be glad to answer any additional questions you have regarding this or any other issue. Just let me know.

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