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 mandates that title insurance companies provide buyers with a notice regarding the 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 may charge a reasonable fee for this assistance, which must be disclosed to the buyer.

The bill also introduces an administrative penalty of up to $500 for title insurance companies that fail to comply with these requirements. Furthermore, it repeals Sections 11.43(n) and (p) of the Tax Code, which are related to the application process for residence homestead exemptions. The new provisions will apply only 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. Existing applications filed before this date will continue to be governed by the law in effect at the time of filing.

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