How Does the Homestead Exemption Work in Texas?

The Texas homestead exemption lowers what you owe in property taxes by removing part of your home’s appraised value before the tax rate is applied. Every school district must knock $140,000 off the taxable value of a qualifying primary residence, and counties, cities, and special districts can layer on more.¹ The exemption also caps how fast your taxable value can grow year over year, and it opens the door to extra breaks if you are 65 or older, disabled, or a disabled veteran. You claim it by filing one form with your county appraisal district.

Who Qualifies

You qualify if you own and live in the home as your primary residence on January 1 of the tax year.² The exemption is only for individuals. Corporations, partnerships, and other business entities cannot claim it, and neither can vacation homes, rentals, or investment properties.

Buying mid-year does not shut you out. If you purchase and move in after January 1, you can still receive the exemption for the remainder of that year, so long as the previous owner did not already claim it on the same home for the same year.²

Heir property owners — people who inherited a home but were never added to the deed — can qualify too. Under Senate Bill 1943, you can file an affidavit establishing your ownership interest along with supporting documents such as the prior owner’s death certificate and a recent utility bill, and the appraisal district cannot demand a recorded deed.³

How Much Comes Off Your Tax Bill

The exemption works in layers. Each taxing body that touches your property — the school district, the county, the city, any special districts — applies its own reduction. The more layers that apply, the smaller your final bill.

School District: $140,000 Off

Every school district in Texas must exempt $140,000 of a qualifying home’s appraised value from school taxes.¹ If your home is appraised at $350,000, the school district applies its rate to $210,000. Once the appraisal district approves your application, this reduction happens automatically.

County, City, and Special District Exemptions

Counties, cities, and other local taxing units may adopt an optional exemption of up to 20 percent of your home’s appraised value. When they offer it, the minimum reduction is $5,000.² Whether your area offers one, and how big it is, depends on the local government’s policy. Check with your county appraisal district to see what applies to your address.

Extra Exemption at 65 or With a Disability

If you are 65 or older or you have a qualifying disability, school districts must give you an additional $60,000 on top of the $140,000, shielding $200,000 of appraised value from school taxes.² Counties and cities may add their own senior and disability exemptions on top.

Total Exemption for 100 Percent Disabled Veterans

Veterans with a 100 percent service-connected disability rating from the U.S. Department of Veterans Affairs, or a determination of individual unemployability, pay no property taxes on their homestead.⁴ This is a total exemption that covers every taxing unit, not just schools. You apply on the same Form 50-114 and attach documentation of your VA rating.⁵

The 10 Percent Cap on Appraised Value

Separate from the dollar exemptions, Texas Tax Code Section 23.23 limits how fast the taxable value of your home can climb. Once your homestead exemption is active, the appraised value used to calculate your taxes cannot rise by more than 10 percent per year, plus the value of any new improvements.⁶ Market value on the appraisal roll can still jump higher; the cap governs the number that goes into your tax calculation. So if your neighborhood’s market values surge 30 percent, your taxable appraised value still rises by no more than 10 percent.

The cap does not apply immediately. It kicks in on January 1 of the second tax year after you first receive the exemption. Move in during 2024 and receive the exemption for 2025, and the 10 percent limit first applies to your 2026 appraisal. The cap expires on January 1 of the first tax year after you stop owning the property, though it continues for a spouse or surviving spouse who takes ownership and keeps the home as a homestead.⁷

Tax Ceiling at 65 and for Disabled Homeowners

When you turn 65 or qualify for a disability exemption, your school district taxes freeze at the dollar amount you owed in the first year you qualified. Even if your home’s value rises or the school rate goes up later, the district cannot charge you more than that frozen amount.⁸ Counties, cities, and junior college districts can adopt their own ceilings.

If the qualifying homeowner dies, a surviving spouse who was 55 or older at the time of death keeps the ceiling, as long as the spouse was living in the home when the homeowner died and continues to own and live there.⁸

The ceiling is portable within Texas. Sell your home and buy another, and the percentage of taxes you were paying (relative to the full tax amount) at the old home carries over to the new one.⁹ Qualifying surviving spouses have the same portability.

How to Apply

You claim the exemption by filing Form 50-114, the Application for Residence Homestead Exemption, with the appraisal district in the county where the property sits. Do not send it to the Texas Comptroller. Get the form from the Comptroller’s website or from your appraisal district office.¹⁰

You must include a copy of your Texas driver’s license or state-issued ID, and the address on that ID has to match the property address on the application. A mismatch will get your application rejected.¹⁰ Active-duty military members and residents of qualifying care facilities who cannot physically occupy the home have exceptions to the matching rule.

The regular filing window is January 1 through April 30 of the tax year you want the exemption to apply to.¹⁰ Miss it and you can still file late. The chief appraiser must accept a late application filed no later than two years after the delinquency date for the taxes on the homestead.¹¹ Because Texas property taxes generally become delinquent on February 1 of the following year, that late window typically runs about 21 months past April 30.

Once approved, the exemption stays in place as long as you own and live in the home as your primary residence. You do not have to reapply every year unless the chief appraiser asks you to verify your continued eligibility.¹⁰

If Your Application Is Denied

If the appraisal district denies your exemption, you can protest to the county’s Appraisal Review Board using Form 50-132, the Property Owner’s Notice of Protest. Any written notice that identifies the property, the owner, and the issue also works. The deadline in most cases is May 15 or 30 days after the appraisal district mails your notice, whichever is later.¹² Bring documentation that supports your claim: proof of residency, ownership records, or evidence of a disability or veteran status.

A Separate Kind of Homestead Protection

Texas uses the word “homestead” for a second, unrelated shield: protection from creditors. Under Texas Property Code Section 41.001, your homestead is exempt from forced sale by most creditors, with no dollar cap on the value protected. The limit is acreage: up to 10 acres for an urban homestead, up to 200 acres for a rural family homestead, and up to 100 acres for a rural single adult.¹³

Some debts still reach the home: the purchase loan, unpaid property taxes on the home, certain home improvement debts contracted in writing, court-ordered partition debts such as a divorce property division, home equity loans, and reverse mortgages.¹³ Filing Form 50-114 gives you the property tax exemption; creditor protection is a separate legal status that does not require the same application.

Effect on Your Federal Tax Return

Your homestead exemption cuts the property tax you actually pay, and the smaller bill is what you can deduct on your federal return. If you itemize on Schedule A, state and local property taxes are deductible up to the federal SALT limit: $40,000 for most filers in 2026, or $20,000 if married filing separately, with a phase-down based on modified adjusted gross income that cannot reduce the deduction below $10,000.¹⁴ The exemption shrinks the tax available to deduct, but for most Texas homeowners the property tax savings dwarf that trade-off.

1
State of Texas. Texas Tax Code Section 11.13 – Residence Homestead
2
Texas Comptroller of Public Accounts. Property Tax Exemptions
3
Texas Legislature. 86(R) SB 1943 – Enrolled Version
4
Comptroller of Public Accounts. 100 Percent Disabled Veteran and Surviving Spouse Frequently Asked Questions
5
State of Texas. Texas Tax Code Section 11.131 – Residence Homestead of 100 Percent or Totally Disabled Veteran
6
State of Texas. Texas Tax Code Section 23.23 – Limitation on Appraised Value of Residence Homestead
7
Texas Legislature Online. SB 1, Hse 2nd Rdg, Amnd 23
8
State of Texas. Tax Code Chapter 11 – Section 11.26
9
Texas Comptroller of Public Accounts. Texas Property Tax Exemptions
10
Texas Comptroller. Application for Residence Homestead Exemption Form 50-114
11
State of Texas. Texas Tax Code Section 11.431 – Late Application for Homestead Exemption
12
Texas Comptroller of Public Accounts. Appraisal Protests and Appeals
13
State of Texas. Texas Property Code Section 41.001 – Interests in Land Exempt from Seizure
14
Internal Revenue Service. Topic No. 503, Deductible Taxes