The new Texas property tax laws passed in 2023 raised the school district homestead exemption to $100,000, lowered school tax rates through state-funded compression, placed a 20% annual cap on appraisal increases for non-homestead properties, and let voters in larger counties elect three members of their appraisal district board. Most of these changes took effect for the 2023 or 2024 tax year and remain in force through 2026. A proposed senior exemption increase went to voters in November 2025.
The $100,000 School District Homestead Exemption
The standard school district homestead exemption jumped from $40,000 to $100,000 under Senate Bill 2.1Texas Legislature Online. Texas Senate Bill 2 – Property Tax Relief Act The first $100,000 of your home’s appraised value is now completely exempt from school district property taxes. On a home appraised at $350,000, the school district can only tax you on $250,000. A home appraised at $100,000 or less owes zero in school district taxes.
This exemption applies only to school district taxes on your primary residence. It does not reduce what you owe your county, city, or special districts such as hospital or water districts. Those entities set their own exemptions, often at much smaller amounts. School taxes make up the largest share of most Texans’ property tax bills, so this one change delivers the biggest dollar savings for most homeowners.
How to Claim It
File Form 50-114 (Residence Homestead Exemption Application) with the appraisal district in the county where your home is located.2Texas Comptroller of Public Accounts. Property Tax Exemptions The form is on the Comptroller’s website and most local appraisal district websites. You’ll need a copy of your Texas driver’s license or state-issued ID showing the same address as the property.3Travis Central Appraisal District. Homestead Exemptions
The standard deadline is April 30 of the tax year you want the exemption to apply. If you miss it, Texas allows late applications up to two years after the delinquency date for taxes on the property.4State of Texas. Texas Tax Code TAX 11.431 – Late Application for Homestead Exemption If a late application is approved and you already paid taxes on the full value, the tax collector must refund the difference automatically. First-time buyers often don’t realize they missed the window until months later, so this late-filing window is worth knowing about.
Extra Relief for Seniors and Disabled Homeowners
School districts must provide an additional $60,000 exemption for homeowners who are 65 or older or have a qualifying disability, on top of the $100,000 general exemption.2Texas Comptroller of Public Accounts. Property Tax Exemptions Total school district exemption for qualifying homeowners: $160,000. On a $300,000 home, a senior would pay school taxes on just $140,000 of value.
Seniors and disabled homeowners also get a tax ceiling, sometimes called a tax freeze. Once you qualify for the over-65 or disability homestead exemption, the dollar amount of school district taxes you owe that first year becomes a cap. Your school taxes will never exceed that amount even if your appraised value rises or rates increase.5Travis County Tax Office. Property Tax Breaks, Over 65 and Disabled Persons Homestead Exemptions The bill can go down in years when rates drop, but it won’t go above the ceiling.
Moving the Ceiling to a New Home
If you sell and buy a new primary residence, you don’t lose the benefit. Texas Tax Code Section 11.26(g) allows you to transfer a percentage-based version of the freeze.6Texas Comptroller of Public Accounts. Texas Property Tax Basics The appraisal district calculates what percentage your frozen amount represented compared to what you would have owed without the freeze, then applies that same percentage to school taxes at your new address.
In practice: say your ceiling kept your school taxes at $1,200, but without the freeze you would have owed $4,800. That’s a 25% ratio. If school taxes on your new home would be $6,000 after your over-65 exemption, your new ceiling becomes 25% of $6,000, or $1,500.7Fort Bend Central Appraisal District. What Is a Tax Ceiling Certificate and How Does It Work Apply for the over-65 or disability exemption on your new home and request a Tax Ceiling Certificate from the appraisal district where your former home was located.
The Proposed $200,000 Senior Exemption
During the 2025 legislative session, the Texas Senate passed Senate Bill 23 and Senate Joint Resolution 85, which would raise the total school district homestead exemption for seniors to $200,000. The proposal went to voters on the November 2025 constitutional amendment ballot, with the increase applying retroactively to the 2025 tax year if approved.8Lieutenant Governor Dan Patrick. Lt. Gov. Dan Patrick Statement on the Texas Senates Bipartisan Passage of Senate Bill 23 and Senate Joint Resolution 85 Check with your local appraisal district to confirm whether the amendment passed and how it affects your 2026 bill.
School Tax Rate Compression
Compression gets less attention than the exemption, but it may save you more, and it benefits every property owner in a school district whether or not you have a homestead exemption. The state sends money to school districts so they can lower their maintenance and operations (M&O) tax rates, which cover daily costs like teacher salaries.
You see the effect as a lower rate on your tax bill. For the 2025 tax year, state compression brought the maximum M&O rate down to roughly $0.63 per $100 of taxable value, with some districts going as low as $0.57 depending on local factors.9Texas Education Agency. Tax Year 2025 Maximum Compressed Tax Rates Many districts charged rates above $1.00 per $100 before compression ramped up. Business owners and landlords benefit too, since the lower rate applies to all taxable property in the district.
The money comes from the state’s general revenue instead of local property tax collections. The tradeoff is that compression depends on ongoing state budget decisions. Future legislatures can adjust the funding level, which would push rates back up if the state pulls back.
The 20% Cap on Non-Homestead Properties
Before 2024, homesteaded properties had a 10% annual cap on appraised value increases, but rental houses, vacation homes, and commercial buildings had no cap. An investment property could see its appraised value jump 40% or 50% in a single year if the market moved that way. Senate Bill 2 created a “circuit breaker” that limits annual appraisal increases on non-homestead real property to 20%.10State of Texas. Texas Tax Code TAX 23.231
To qualify, the property’s appraised value must fall at or below a threshold the Comptroller adjusts annually for inflation. The threshold was $5 million for 2024 and rose to $5.16 million for 2025.11Texas Comptroller of Public Accounts. Property Tax Today The 2026 threshold follows the same CPI-based adjustment, so check the Comptroller’s website for the current figure. This covers the vast majority of small commercial properties and residential rentals in the state.
A few details that catch owners off guard. The cap doesn’t apply until you’ve owned the property for at least one full tax year, and it resets when ownership changes. New improvements beyond routine maintenance are added on top of the capped value at full market value.10State of Texas. Texas Tax Code TAX 23.231 Properties with a homestead exemption get the 10% homestead cap instead and are not eligible for the circuit breaker.12Harris Central Appraisal District. Circuit Breaker Cap
You don’t need to apply. The appraisal district applies the cap automatically to every qualifying property.13Travis Central Appraisal District. Circuit Breaker Limitation The critical date is December 31, 2026, when this provision expires unless the legislature renews it.10State of Texas. Texas Tax Code TAX 23.231 If you own non-homestead property, watch the next legislative session closely.
Elected Seats on Appraisal District Boards
Every member of a local appraisal district’s board of directors used to be appointed by the taxing entities the district serves. Taxpayers had no direct say in who ran the office that set their property values. Senate Bill 2 changed that for larger counties. In counties with a population of 75,000 or more, three of the nine board members are now elected by voters at the general election for state and county officers.14Texas Secretary of State. Election Advisory No. 2023-24 – NEW LAW: Elections for Appraisal Districts in Counties with a Population of 75,000 or More The remaining five are appointed by taxing units, and one additional seat fills out the nine-member board.
Elected directors serve staggered four-year terms beginning January 1 of an odd-numbered year.15Texas Comptroller of Public Accounts. Appraisal District Board of Directors Candidates must live in the county and cannot be employees of a taxing unit. These elected members also participate in appointing the Appraisal Review Board, the panel that hears property tax protests.
Protesting Your Appraisal Under the New Rules
Even with the larger exemptions and new caps, your appraised value still drives the final bill. If the appraisal district overvalued your property, you have the right to file a formal protest. It costs nothing.
The deadline is May 15 or 30 days after the appraisal district mails your Notice of Appraised Value, whichever is later.16State of Texas. Texas Tax Code TAX 41.44 – Notice of Protest File Form 50-132 (Notice of Protest) with the appraisal review board in your county.17Texas Comptroller of Public Accounts. Property Owners Notice of Protest Getting it filed on time matters more than writing a perfect argument at the start.
The strongest evidence is comparable sales showing similar homes sold for less than your appraised value. You can pull data from real estate listing sites, county deed records, or the appraisal district’s property search tool. A recent independent appraisal carries weight too. If your property has condition problems, photos and written repair estimates work well, but whatever condition you’re claiming must have existed as of January 1 of the tax year.
If the appraisal review board rules against you, you can appeal to district court or, for properties valued under $5 million, request binding arbitration by filing Form AP-219 within 60 days. Arbitration deposits range from $450 for homesteads valued at $500,000 or less to $1,550 for non-homestead properties valued between $3 million and $5 million.18Texas Comptroller of Public Accounts. Arbitration Deposit and Arbitrator Fee Schedule If the arbitrator’s decision is closer to your proposed value than the board’s, you get the deposit back minus a $50 administrative fee.