‘Unreasonable’ fees for exemption filing

But officials warn they have noticed an uptick in third parties charging hefty fees — up to half the recovered amount — to help homeowners apply for the exemptions. They are not calling these practices scams, but they urge homeowners to know the facts: Securing an exemption is simple and should cost nothing.

Kathy Hollomon, chief deputy at the county tax office, said she knows of someone due homestead-related refunds totaling $6,000. But she will split that windfall with a company agreeing to pursue the exemption for a price.

“There are people who have likely paid considerably more,” Holloman said. “If someone does not want to mess with pursuing a homestead exemption, that’s fine, but I believe some simply do not know their options. Maybe they moved here from out-of-state, sold their home in California for $1 million and bought one in China Spring for $500,000. That’s a lot of money to be saved.”

School districts statewide must reduce by $100,000 the appraised value of homes that qualify for homestead exemptions. McLennan County and McLennan Community College reduce homestead values by 20% each, the city of Waco trims homestead values by 15%, Hollomon said.

The tax office takes the matter seriously, issuing a press release reminding residents it is free to file a homestead exemption form.

“It appears that there are out of town companies that are filing Residence Homestead Exemptions for property taxes and charging unreasonable amounts of money to do so,” McLennan County Tax Assessor-Collector Randy Riggs said in the press release. “An exemption for a homestead may be filed for free with the McLennan Central Appraisal District.”

The homestead exemption application, known as Form 50-114, is available at mclennancad.org or from the Texas State Comptroller’s Office at comptroller.texas.gov. The form includes three pages, though only two pages have fields for applicants to fill out.

“Some citizens in McLennan County have allowed third-party companies to file the form on their behalf charging hundreds of dollars,” according to the press release.

It says anyone with questions may call the county tax office at 254-757-5130 or the McLennan Central Appraisal District at 254-752-9864.

Hollomon said the tax office a year ago noticed an influx of letters from third parties, advising they would be collecting refunds related to homestead exemptions, and would take their agreed-upon fee from the proceeds before passing along the balance to the homeowner involved.

She said in some cases the tax office already had mailed refunds to homeowners before learning of third-party involvement. She estimated the tax office has received about 200 such letters, which arrive in waves and then stop. She said the tax office recently received 31 such letters.

Many letters come from Refund Advisory Corp., Hollomon said.

A Refund Advisory Corp. employee in the Dallas-Fort Worth area, who identified himself as a refund recovery specialist but would not give his name, said the company receives inquiries, but not what he would call complaints.

He said the company maintains a presence statewide. Some taxing entities take a straightforward approach to processing homestead exemption requests, he said, while others “are more complicated.” Some homeowners may want help dealing with homestead rejection letters, having received “a list of reasons why they were not approved.”

The staffer said the company charges a contingency fee that varies from case to case.

Jim Halbert, acting chief appraiser at the McLennan Central Appraisal District, said having third parties enter into contracts with homeowners “is something that has been around awhile, but we have seen an uptick.”

“These are legitimate companies, but people are paying for something available free,” Halbert said. “You can fill out the forms on our website or in our office,” which is located at 315 S. 26th St.

Homeowners who have failed to request homestead exemptions they were eligible for can pursue refunds for the two years before the current tax year, Halbert said.

Owners generally qualify for homestead exemptions on any type of home they use as their primary residence, including up to 20 acres of land used for residential purposes. Additional exemptions may apply for homeowners who are 65 or older, disabled or military veterans.