Are Texas Property Taxes Going Down? Exemptions, Caps, Rates

For most Texas homeowners, yes, property taxes are going down, at least on the school district portion of the bill. Two rounds of legislative cuts in 2023 and 2025 raised the general homestead exemption to $140,000 and pushed school tax rates well below the old $1.00 per $100 benchmark. Whether your total bill actually drops still depends on what your county appraisal district says your home is worth and what your city, county, and special districts charge on top of school taxes.

What Changed and When

The first round of cuts came out of a 2023 special session. Senate Bill 2 used roughly $18 billion from a state budget surplus to raise the homestead exemption, compress school tax rates, and create a new appraisal cap on commercial and rental property.¹ Voters had to approve a constitutional amendment to let it take effect, and in November 2023 Proposition 4 passed with about 83 percent support, applied retroactively to the 2023 tax year.²

The second round arrived in the 2025 regular session. Senate Bill 4 pushed the general homestead exemption from $100,000 to $140,000 for the 2025 tax year, again contingent on a constitutional amendment that voters approved in November 2025 as Proposition 13.³ A companion bill, Senate Bill 23, raised the extra exemption for homeowners age 65 or older and disabled homeowners, bringing their combined school-tax exemption to $200,000.⁴ Across both sessions, the state has committed more than $50 billion to property tax relief.⁵

The Homestead Exemption Does the Heavy Lifting

The homestead exemption subtracts a fixed dollar amount from your home’s appraised value before school district taxes are calculated. Before 2023, that deduction was $40,000. Senate Bill 2 tripled it to $100,000, and Senate Bill 4 raised it again to $140,000 starting with the 2025 tax year.³

The math is simple. A home appraised at $350,000 has its first $140,000 excluded from school tax calculations, leaving $210,000 of taxable value for school purposes. Under the old $40,000 exemption, the same home would have been taxed on $310,000. At a school rate near $0.80 per $100 of value, that one change saves roughly $800 a year compared to the pre-2023 system.

Homeowners 65 or older and homeowners with a qualifying disability get even more. Senate Bill 23 raised their additional exemption from $10,000 to $60,000, which stacks on top of the general $140,000 for a combined $200,000 deduction from school-taxable value.⁴ For the average senior homeowner, that effectively wipes out school property taxes, especially once the over-65 tax ceiling that freezes school taxes at the amount paid in the qualifying year is factored in.

Veterans with a 100 percent disability compensation rating from the U.S. Department of Veterans Affairs pay no property taxes on their residence homestead at all. That exemption covers school, county, city, and every other taxing entity, and a surviving spouse who has not remarried can inherit it.⁶

If you already have a homestead exemption on file, the higher amounts apply automatically. You do not need to refile.⁷ New homeowners and anyone who has never applied do need to file, and the window is January 1 through April 30 each year with the appraisal district in the county where the property is located.⁸ Missed the April 30 deadline? You can still file a late application up to two years after the taxes on that property became delinquent, which is usually February 1 of the year after the tax year in question.⁹

School Rate Compression

The homestead exemption lowers your taxable value. Compression lowers the rate applied to that value. Both work at the same time.

School tax bills have two pieces. The Maintenance and Operations (M&O) rate funds daily school costs. The Interest and Sinking (I&S) rate pays off bond debt, usually from school construction. Compression only touches the M&O side. The state sends districts money to replace what they would have collected locally and then requires them to lower their M&O rate. For tax year 2025, the maximum compressed M&O rate is $0.8022 per $100, down from $1.00 per $100 before compression began in 2019.¹⁰

The I&S rate catches people off guard. It sits on top of the compressed M&O rate and is entirely controlled by each district’s bond debt. A district that just passed a major bond election may have an I&S rate of $0.30 or more per $100, and none of that is affected by state compression. The state has committed to holding districts harmless financially, sending additional state aid to cover revenue lost to both the higher exemptions and the lower rates.¹¹

Appraisal Caps Limit How Fast Your Value Can Rise

Lower rates and higher exemptions can still be eaten up by a jump in your home’s appraised value. Two caps slow that down.

If you have a homestead exemption on file, your appraised value cannot increase more than 10 percent per year, no matter what the market does. The cap applies to the prior year’s appraised value plus the value of any new improvements.¹² It smooths out increases rather than freezing them. If the market surges 30 percent in a single year, the appraisal district can raise your value by 10 percent that year and keep closing the gap in later years.

A newer 20 percent cap, created by Senate Bill 2, covers non-homestead properties, including commercial buildings, rental houses, and second homes, as long as the appraised value is $5 million or less. This cap expires on December 31, 2026.¹² Unless the legislature renews it, commercial and rental owners lose that protection in 2027, and the 2027 appraisal cycle could bring a sizable catch-up increase.

Why Your Bill Might Still Go Up

All of the relief above applies to school district taxes. Schools usually make up the biggest share of a bill, but not the whole thing. Cities, counties, hospital districts, community college districts, and special districts each set their own rates independently. The state has no authority to compress those rates. If your city raises its rate by a few cents per $100 to fund infrastructure or public safety, that increase lands on your bill regardless of what happened with school taxes.

Rising appraisals remain the biggest wild card. Even with the 10 percent homestead cap, a property that was undervalued for years can keep climbing as the appraisal district closes the gap toward market value. Add a pool, renovate a kitchen, or build an addition, and the value of those improvements lands on top of the capped number. In a hot market, independent rate decisions by multiple taxing entities and a steadily rising appraisal can offset or exceed the legislative savings.

Renters see a less direct picture. Tax savings flow to the landlord, and whether any of it reaches tenants depends on the market. Where demand outstrips supply, landlords set rents based on what tenants will pay, and a tax cut is unlikely to change that. In softer markets with higher vacancy, lower operating costs may slow rent increases over time. Expecting a dollar-for-dollar pass-through is unrealistic.

Protesting Your Appraisal

Legislative relief only controls the rate side. The other side is your property’s appraised value, set locally by your county appraisal district. If your appraisal came in higher than you think is justified, protesting is the most direct way to lower your bill.

The deadline to file a notice of protest is May 15, or 30 days after the appraisal district mails your notice of appraised value, whichever is later.⁸ Miss that window and you are stuck with whatever value the district assigned.

Most districts offer an informal meeting first, where you sit down with a staff appraiser and present your case. Bring recent comparable sales, photos of condition issues that hurt value, and your own number. A surprising share of protests get resolved here. If you cannot agree, your case goes to a formal hearing before the Appraisal Review Board, where both sides present evidence under oath and the board votes on a final value.¹³ Professional property tax consultants will handle a protest for a percentage of the first-year savings, typically 15 to 50 percent, with nothing owed if they do not win. Most homeowners can handle a straightforward protest themselves with some preparation.

Key Dates

January 1 – April 30: File a homestead exemption application with your county appraisal district if you have not already.
May 15 (or 30 days after your notice of appraised value): Deadline to file a protest with the Appraisal Review Board.
January 31: Last day to pay property taxes before they become delinquent on February 1.⁸
December 31, 2026: Expiration of the 20 percent appraisal cap on non-homestead properties unless the legislature renews it.¹²

1
Texas Legislature Online. 88(2) SB 2 – Committee Report (Unamended) Version – Bill Analysis
2
Ballotpedia. Texas Proposition 13, Increase Homestead Property Tax Exemption Amendment (2025)
3
Texas Legislature Online. 89(R) SB 4 – Enrolled Version – Bill Text
4
Lt. Governor of Texas. Lt. Gov. Dan Patrick Statement on the Passage of Senate Bill 23 and Senate Joint Resolution 85
5
Texas House of Representatives. 2025 Rotunda Report – 89th Legislature Session Summary
6
Texas Comptroller of Public Accounts. 100 Percent Disabled Veteran and Surviving Spouse Frequently Asked Questions
7
Texas Comptroller of Public Accounts. Property Tax Exemptions
8
Texas Comptroller of Public Accounts. Property Tax Law Deadlines
9
State of Texas. Texas Tax Code Title 1 Subtitle C Chapter 11 Subchapter C Section 11-431 – Late Application for Homestead Exemption
10
Texas Education Agency. Tax Year 2025 Maximum Compressed Tax Rates
11
LegiScan. Supplement: TX SB2 – 88th Legislature 2nd Special Session – Analysis (Enrolled)
12
Texas Comptroller of Public Accounts. Valuing Property
13
Texas Comptroller of Public Accounts. Model Hearing Procedures for Appraisal Review Boards