Texas property taxes are some of the highest in the nation. So you often hear Texans complaining about them. A little-known fact is that the state doesn't assess Texas property taxes. Instead, they're determined and administered by 254 individual appraisal districts across Texas. Residential property is taxed in proportion to its appraised value, but state law provides for certain exceptions called homestead exemptions.
The 2025 legislative session will likely impact the state-wide Texas homestead exemption for 2025 onward, as well as how often you need to verify your property's exemption status to keep it.
This comprehensive guide to understanding Texas homestead exemptions and rules will help you avoid late filing headaches and ensure that you don't miss out on valuable tax savings.
What Is the Texas Homestead Exemption?
Texas homestead exemptions reduce the amount of property tax homeowners must pay. Property taxes are calculated using the appraised value minus the exemption amount, lowering a homeowner's overall tax liability.
Texas statute requires local tax appraisers to provide a mandatory homestead general (11.13 (b)) exemption, in which your home's assessed value is reduced by $100,000 for your school district's taxes.
Local appraising entities may also choose to offer tax exemptions of up to 20% of a property's total value, but these local options cannot be less than $5,000. They stack on top of the general exemptions provided under state law.
How Does a Homestead Exemption Work in Texas?
Chief appraisers are solely responsible for determining whether a property qualifies for a homestead exemption. They also have the authority to provide a partial exemption or total exemption:
Partial exemption: Deducts a percentage or fixed dollar amount of a property's value to determine the amount that is subject to being taxed. For example, if your home is appraised at $300,000, and you receive the school district exemption of $100,000, you will only be taxed at the $200,000 valuation instead of at $300,000.
Total exemption: Excludes a property's entire value from taxation. There are additional exemptions for homeowners over age 65, those with disabilities, and veterans that may entitle you to a total tax exemption, depending on the value of your home. Other local tax exemptions may apply as well.
Before 2025, the only action you had to take to qualify for a homestead exemption Texas credit was to file a Residence Homestead Exemption Application Form 50-114 with your local appraisal school district. A property owner only needed to file the form once in the county where they purchased the property by May 1 of the tax year for which the exemption was being claimed. That has changed under new laws.
What's New for 2025
In November 2023, the Texas state legislature passed Proposition 4. This had several implications for property taxes in Texas, including the:
The frequency with which you will need to have your exemption status verified
Exemption amount you will receive for your property
New homestead cap criteria for properties that don't otherwise qualify for the general exemption
Exemption Verification Changes
Before Proposition 4, taxpayers who filed Form 50-114 when they purchased a property never had to reapply or verify their ownership to receive a homestead exemption. The exemption remained in effect until:
The property was sold
The taxpayer moved and claimed the exemption on another property
The property owner's death
Under new Texas homestead exemption rules, appraisal districts are now required to verify the homestead eligibility of property owners at least once every five years.
The update is meant to ensure that a property hasn't been sold or otherwise changed ownership status and that the correct taxpayer benefits from the exemption.
Most appraisal districts have been mailing taxpayers notices instructing them to verify their homestead exemption eligibility within the time stated in the letter. For instance, Harris County sends an annual mailer to addresses. If it's marked as return to sender or undeliverable, you'll be notified to confirm your exemption status.
Homeowners who aren't aware of the new rule may ignore the notices. If a taxpayer doesn't respond to a verification letter, the appraisal district has the right to remove the homestead exemption, causing the property taxes to increase!
This change may cause hardship for mortgage holders in particular because escrow account projections are based on the prior year's exemptions and estimated tax liability. If you don't respond to requests to verify your homestead exemption eligibility, your property taxes will be higher than in previous years, which may result in your escrow account coming up short.
Increase in Exemption Amount
In 2023, Proposition 4 increased the homestead tax exemption in Texas from $40,000 to $100,000, providing additional tax relief for property owners. The new exemption amount applies to the 2023 tax year and beyond.
However, it's worth noting that in the current 89th Texas Legislative session, one hot-topic bill is Senate Bill 4. Senate Bill 4 (SB 4) increases the homestead exemption by another $40,000 to $140,000 ($150,000 for those 65+ since they already have an additional $10,000 exemption).
New Caps on Appraisal Increases
Residence homestead caps limit the percentage by which property taxes can increase yearly. Under these caps, homeowners lock in an appraised property value when they purchase their residence. After that, annual tax increases are restricted to no more than 10% of the previous year's appraised value, plus any new improvements to the property.
For example, a property with an established appraisal value of $100,000 can only be taxed for a value of $110,000 the following tax year, even if the estimated market value of the residence is higher.
These tax increase caps protect homeowners from ballooning property values.
Impact on Renovations
Because residence homestead caps go into effect and remain stable the January after you qualify, new homeowners in Texas should consider putting off major home repairs or improvements for the first year of ownership. Immediate additions become part of the appraised value of your property, raising your residential taxes.
Proposition 4 from 2023 extended cap rules to some residential properties that didn't previously qualify for a homestead exemption, including short and long-term rental homes, townhouses, and apartment buildings appraised at less than $5.16 million.
Called the Circuit Breaker Limitation, it caps appraisal increases at no more than 20% each year for the next three years.
The caps for recently covered commercial and residential properties expire in 2026 unless Texas lawmakers extend them.
Eligibility Requirements for the Texas Homestead Exemption
There are certain eligibility requirements you must meet to qualify for state of Texas property tax exemptions:
The property must meet the definition of a residence homestead. Texas defines a residence homestead as a house or other residential structure sitting on up to 20 acres of land, when the land is used for residential purposes.
Applicants must have an ownership interest in the property. If a property has multiple owners, only one can claim the homestead exemption in any given tax year.
You must use the property as your main place of residence by stating that you don't claim another homestead exemption on another residence in Texas or in any other state.
As noted earlier, Senate Bill 1801 requires property owners to prove their homestead tax eligibility at least once every five years. It's important to respond to any correspondence from your local district appraiser's office regarding re-verification so that your homestead exemption doesn't lapse. If you fail to provide verification, your property taxes may increase.
As long as you acquire a property after January 1 of the tax year in question, you're eligible for a prorated residence homestead exemption for the portion of the year you qualified as long as the previous owner didn't receive the same exemption for that year.
Additional Property Tax Exemptions in Texas
Several additional property tax exemptions in Texas are specific to certain homeowners. If you qualify, these exemptions are added to the general homestead deduction for even more savings on your property taxes.
Over-65 Exemption
Texas residents over 65 years old who also meet eligibility requirements for the general homestead exemption qualify to receive an additional $10,000 residence homestead exemption for their local school district.
Individual tax entities may also adopt an additional local option residence homestead exemption for Texans over 65. Local exemptions cannot be less than $3,000.
You, or a spouse living in the residence, must be 65 or older after January 1 to receive over-65 exemptions for the entire tax year.
Surviving spouses 55 or older who continue to use a property as their primary residence can keep a deceased spouse's over-65 exemption if their spouse died in a year that they qualified.
Disabled Persons Exemption
Eligible homeowners who meet the definition of disabled, allowing them to receive disability benefits from the Social Security Administration, qualify for a disabled persons residence exemption. Note, receiving payments from any other disability payment program does not automatically qualify you for this exemption.
Applicants must provide supporting documentation of a disability showing they're unable to work and submit it to their local appraisal office.
Eligible persons can receive an additional $10,000 exemption from their school district. A local option of no less than $3,000 may also be available.
If you qualify for both the over-65 exemption and the disabled persons exemption, you can only take one of the school district exemptions. However, you may be able to claim a school district exemption for one qualifying criterion and a local exemption for the other for the most tax savings.
Disabled Veterans Exemption
Veterans receiving 100% compensation from the U.S. Department of Veterans Affairs due to a 100% disability rating or determination of individual unemployability qualify for a total property tax exemption in Texas. Meaning, you wouldn't pay property taxes.
Tax exemption amounts decrease in increments as a veteran's disability rating decreases. For example, veterans with a
70-99%
VA disability rating receive a $12,000 residence tax exemption, while veterans with a 50-69% VA disability rating receive a $10,000 exemption.
Apply at your local appraisal district office between January 1 and April 30 using the same document used to apply for the general exemption.
Surviving spouses of qualifying veterans, or the spouses of veterans who would have qualified at the time of their death, may be eligible for the disabled veteran's exemption if they:
Do not remarry
Used the property as their primary residence at the time of their spouse's death
Plan to continue to use it as their primary residence
Benefits of the Texas Homestead Exemption
A homestead exemption in Texas saves you thousands of dollars in property taxes and protects you from the impacts of housing market increases. Exemptions can be stacked on top of one another, and if you're over 65, you can take your homestead exemption with you when you move.
Lowered Tax Liability
A general homestead exemption reduces the appraisal value of your residence. Recent state laws increased the amount homeowners can exempt from their tax assessment from $40,000 to $100,000.
Example: A home valued at $300,000 in a school district with a 1.5% tax rate would cost $4,500 in annual property taxes without a homestead exemption. By increasing the exemption amount to $100,000, Proposition 4 lowered the home's appraised value to $200,000 and reduced the homeowner's tax liability to $3,000.
Protections From Market Increases
Appraisal increase limits protect homeowners from rapid hikes in the Texas housing market. Caps allow for a gradual tax increase, regardless of the market value of a property.
Security for Fixed-Income Residents
Residents on a fixed income may apply for additional tax relief, which stacks on top of Texas' general exemption.
Transferability Between Residences (Over-65 Exemption)
Exemptions are transferrable once a property owner reaches age 65. This is beneficial when moving from a school district with a lower tax ceiling to one with a higher rate because the homeowner continues to be taxed at the previous rate.
How To Apply for the Homestead Tax Exemption
When you purchase a residential property in Texas, apply for the homestead tax exemption at the same time. Get started today. Here's how:
File a Residence Homestead Exemption Form 50-114 with your appraisal district. Find the form online on your local appraiser's website, and complete the application using accurate and up-to-date information.
Submit the form and other required documents, including a copy of your
Texas driver's license or state-issued ID and proof of residency (a utility bill or bank statement), before May 1 of the tax year for which you plan to use the exemption. Forms may be submitted online, by mail, or in person.
Late applications can be filed up to two years after the delinquency date. February 1, 2026, will be the last day to file late for the 2024 tax year (Texas Tax Code 11.43(d)).
Respond promptly to any verification requests from your local tax appraisal office to maintain your property's homestead tax exemption status.
What To Do If Your Application Is Denied
If your homestead exemption application is denied, you can appeal the decision by filing a protest with your local appraisal review board. Ownwell can help with protesting property taxes.
Simply answer a few short questions here.
FAQs About the Texas Homestead Exemption
1. What if I move to a new home?
If you are under 65 and move to a new home, you can claim a homestead Texas exemption on the new property. It will be assessed based on the new property's value rather than the value of your previous home. Texans over 65 can use a ceiling transfer to maintain the same tax rate on a new, qualifying home that they were paying on their previous property.
2. Can I have multiple homestead exemptions?
No. You can only claim a homestead exemption on your primary residence in Texas or on your primary residence in another state. If you are over 65, disabled, or a qualifying veteran, you may be able to combine a general homestead exemption with another exemption for more tax savings.
3. Does my eligibility change over time?
As long as you meet the eligibility requirements for the general homestead exemption, you will continue to receive it. Once you reach age 65, or if you become disabled, you may be eligible for additional exemptions.
4. What happens if I miss the application deadline?
You have up to two years after the tax year application deadline to claim a homestead exemption for that tax year. Ownwell can help you retroactively apply for exemptions!
5. Can the exemption be revoked?
A Texas homestead exemption could be revoked if it's found that a taxpayer provided false information regarding the property or their ownership circumstances.
6. How much does a homestead exemption save in Texas?
The general homestead exemption can save a property owner anywhere from a few hundred to several thousand dollars, depending on the appraised value of the property. Additional exemptions for seniors, disabled Texans, and veterans save homeowners even more.
7. When can you file for a homestead exemption in Texas?
You should file for a homestead exemption when you purchase your property. Plus, ensure that you verify your homestead exemption at least once every five years!
Need Help Retroactively Applying?
Getting an exemption has never been easier — let Ownwell handle it for you. We also offer homestead exemption monitoring, so you don't have to worry about verifying once every five years!
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