H.B. No. 3412 aims to enhance the process of obtaining a residence homestead exemption from ad valorem taxation for home buyers in Texas. The bill introduces a new subchapter to the Insurance Code, which mandates that title insurance companies provide buyers with a notice regarding potential eligibility for residence homestead exemptions during the closing and settlement of residential real property transactions. This notice must include eligibility criteria, application deadlines, instructions for completing the application, and a statement that the title insurance company is required to assist the buyer in applying for the exemption unless the buyer waives this right. Additionally, title insurance companies are permitted to charge a reasonable fee for this assistance, which must be disclosed to the buyer.

The bill also repeals Sections 11.43(n) and (p) of the Tax Code, which may have previously governed aspects of the homestead exemption application process. The new provisions will only apply to transactions for the purchase of real property under contracts entered into on or after the effective date of the Act, which is set for September 1, 2025. Furthermore, applications for residence homestead exemptions filed before this date will continue to be governed by the existing law at the time of filing. Violations of the new requirements by title insurance companies could result in administrative penalties of up to $500.

Statutes affected:
Introduced: Tax Code 11.43 (Tax Code 11)