Marcia's answer best outlines the basic rules. There are a few other things you need to understand and an example might help.

Your tax bill is composed of taxes from several taxing bodies, including the City of McKinney, McKinney ISD, Collin County, Collin County Community College District, and others, whose rates and exemptions are defined for 2008 as shown below.
Taxing Body Name, Rate, Homestead, Over65, Disabled Exemptions
MCKINNEY CITY, 0.585500 0 50,000 50,000
MCKINNEY ISD, 1.517000 15,000 10,000 10,000
COLLIN CO COM COLLEGE, 0.086493 0 30,000 20,000
COLLIN COUNTY, 0.242500 5% 30,000 20,000

Your total tax is the rate that applies to the property less the exemption allowed for you in that body's area times the rate shown. The rate does NOT change. The assessed value is reduced by the exemption amount. Notice that Collin County reduces the value of a homestead by 5% of its value, not a dollar amount. All the Over65 amounts are dollars of reduction.

So, for example, if your house in the city is appraised to be $180,000, your taxes would be:
Unexempt Homestead alone Over-65 w/Homestead Disabled
City of McKinney $1,053.90 1,053.90 761.15 761.15
McKinney School Dist 2,730.60 2,503.05 2,351.35 2,351.35
Collin Cty Comm Coll Dist 155.69 155.69 129.74 138.39
Collin County 436.50 414.68 341.93 366.18
other taxes may apply ? ? ? ?
Total $4,376.69 4,127.32 3,584.17 3,617.07

For those over who reach 65 they are eligible to claim the Over65 exemption in the year they attain that age. Despite what Patrick wrote you may receive the exemption immediately for the current tax year, NOT just if you apply between January and April. Yes, it is true you must have occupied the property on January 1 and claimed it as homestead during the January-April timeframe and claimed no other property in Texas as your principal residence for homestead purposes.

So, if your birthday is August 8, you may claim the over-65 school tax exemption for 2009 on August 8. You must provide proof of your age via birth certificate or driver license copy when applying. You must apply by August 7 of the following year (before the anniversary of your qualification) to get the exemption for that applicable tax year. You may have misunderstood Patrick's comment about getting it next year -- it's the same year.

Your spouse also gets the exemption but cannot get a separate exemption somewhere else in Texas.
In the event that a spouse dies who claimed the exemption, the living spouse may continue to receive the exemption, provided they are over 55 at the time of death.

I hope this clarifies things a little.

Yes to Patrick answer well authored on how to figure

If you have any questions contact Colln County tax office for details

National Featured Realtor and Consultant, Texas Mortgage Loan Officer, Credit Repair Lecturer
Follow me on Twitter: http://twitter.com/Lynn911
Lynn911

Hi Robert,

As long as one of you is over 65 (and still breathing) then you qualify for the exemption if you 1. own the property on January 1st (you will qualify next year), 2. You occupy the property as your principle residence on January 1st, & 3. you or your wife have not claimed residence homestead on another property. You must file for the exemption between January 1st and April 30th but see the application form below for more information. If you purchase the property this year, the taxes for the portion of 2009 that you own the property will be based on whatever exemption is currently on the property.

The exemption reduces the tax value of the property for the school portion of the property tax by $10,000. See the chart on this link: http://www.collincad.org/taxrate.htm. Click on 2008 tax rates. If you are buying a 200,000 house then the tax value for McKinney ISD will be reduced to $190,000. The school tax rate is 1.517 x $190,000 or $2882 for the school portion of your property tax. Without the exemption the school tax would be 1.517 X $200,000 or $3034. The City portion of the property tax is a $50,000 exemption for McKinney and the tax rate is 0.585500. $150,000 x 0.585500 = $878 vs $1171 without the exemption.

MCKINNEY CITY Over 65 Homestead 50,000 Tax rate 0.585500
MCKINNEY ISD Over 65 Homestead 10,000 Tax rate 1.517000

The amount of the exemption varies by city and school district.

This is a link to the application form which provides more detail: http://www.collincad.org/download_forms.html . Be sure to see the second page, or back of the form for filing deadlines and late filing.

Let me know if I can be for further assistance. Have a great Labor Day!

P.S. I'm laboring tomorrow if you need anything.

to my knowledge this does not just pertain to McKinney and applies anywhere in Texas. If yall have not chosen a Realtor yet, I would love the opportunity to talk to you about what I can offer.

Beyond experience and personal service, my lack of a large name brokers means I can put 20% of my commission back in your pocket.

Thanks
RJ
214-682-0598

Bob,

One more thing-here's a sample of what the form looks like: http://www.collincad.org/collinhomesteadblank.pdf

Regards,
Marcia

If you are over 65, you qualify for the over 65 exemption. It is simply based on your age. In Texas, you will claim a Homestead exemption on the property that you reside in as of January 1. You can only claim this exemption on 1 property, The rules for the over 65 exemption are that you may claim the exemption as soon as you turn 65, own the home, and live in it as your principle residence.

Hope that helps. For more information on other possible exemptions, go to: http://www.collincad.org

Marcia