Texas does have a property tax ban, but it only binds the state government. The Texas Constitution prohibits Austin from levying any property tax, yet school districts, counties, cities, and special districts still can and do. What actually shrinks your bill as a homeowner is a stack of local-level limits: a $140,000 school district homestead exemption approved by voters in 2025, a 10% annual cap on how much your taxable value can rise, a tax ceiling that freezes school taxes once you turn 65 or qualify as disabled, and a full exemption for 100% disabled veterans.
What the Constitutional Ban Actually Prohibits
Article VIII, Section 1-e of the Texas Constitution bars the state from imposing an ad valorem tax on any property within Texas.1State of Texas. Texas Constitution Article VIII – Taxation and Revenue The state funds itself instead through sales taxes, motor fuel taxes, franchise taxes on businesses, and various fees.
The ban stops at the state line of government. Local taxing entities keep full authority to assess and collect property tax, and most homeowners get billed by several at once: a school district, a county, usually a city, and often one or more special districts such as municipal utility districts, hospital districts, community college districts, or rural fire protection districts.2Harris County Appraisal District. Guide to Understanding the Property Tax Process Each sets its own rate. So when people ask whether Texas bans property taxes, the honest answer is that the state is banned from collecting them, and local collections are what the legislature has been working to shrink through exemptions and caps.
The $140,000 School District Homestead Exemption
Every Texas homeowner who lives in their home as a primary residence qualifies for a mandatory school district homestead exemption. For the 2025 tax year, school districts must exempt $140,000 of your home’s appraised value from taxation.3State of Texas. Texas Tax Code Title 1 Subtitle C Chapter 11 Subchapter B Section 11-13 – Residence Homestead On a home appraised at $350,000, school taxes apply only to $210,000. Voters approved the increase from the previous $100,000 exemption through Proposition 13 in November 2025, and the implementing legislation (SB 4) took effect immediately.4Texas Comptroller of Public Accounts. Property Tax Exemptions
To qualify, you have to own the property and occupy it as your principal residence.4Texas Comptroller of Public Accounts. Property Tax Exemptions Rental properties and vacation homes don’t count. Houses, condos, and manufactured homes all qualify. You generally file an application with your county’s appraisal district by April 30 of the year you’re claiming it. Once approved, the exemption renews automatically each year unless your eligibility changes.5Texas Comptroller of Public Accounts. Residence Homestead Exemptions
One important boundary: the $140,000 figure applies only to school district taxes. Counties and cities may offer their own optional homestead exemptions, but the amounts and eligibility vary by jurisdiction. Some cities grant a percentage-based exemption, often 20% of appraised value, while others offer a flat dollar amount or none at all.
Extra Protection for Homeowners 65 and Older or Disabled
Turning 65 or qualifying as disabled unlocks two separate benefits on top of the standard homestead exemption.
First, you get an additional $60,000 exemption from school district taxes.6Texas Comptroller of Public Accounts. Property Tax Law Changes 2025 A qualifying senior with a $350,000 home would owe school taxes on just $150,000 of value. Counties and cities also have the option to grant an additional exemption of at least $3,000 for these homeowners, though not all do.
Second, your school district tax bill gets permanently frozen. Tax Code Section 11.26 sets a ceiling at whatever you paid the school district in the first year you qualified for the age-65 or disability exemption.7Office of the Attorney General of Texas. Opinion No. KP-0470 – Calculation of the Limitation of School Tax on Homesteads of the Elderly or Disabled Under Texas Tax Code Section 11.26 After that, your school tax amount stays the same even if the appraised value doubles or the rate climbs.
The one exception involves home improvements. If you add a room, build a garage, or make other upgrades beyond routine maintenance and legally required repairs, the school district can adjust your ceiling upward by applying the current tax rate to the added value, and the new ceiling locks in going forward.8State of Texas. Texas Tax Code TAX 11-26 Cosmetic updates and ordinary repairs don’t trigger an adjustment.
The ceiling applies only to school district taxes. Counties and cities may voluntarily adopt their own tax ceilings for seniors and disabled homeowners, and many do, but the school district freeze is the only one required by state law.
Full Exemption for 100% Disabled Veterans
Veterans who have received a 100% disability compensation rating from the U.S. Department of Veterans Affairs are exempt from property taxes on the full appraised value of their residence homestead. Tax Code Section 11.131 removes the entire tax burden, not just the school district portion, so the veteran owes nothing to any local taxing entity on that home.9State of Texas. Texas Tax Code Title 1 Subtitle C Chapter 11 Subchapter B Section 11-131 – Residence Homestead of 100 Percent or Totally Disabled Veteran A VA rating of individual unemployability also qualifies.
The exemption transfers to a surviving spouse who was married to the veteran at the time of death, as long as the spouse hasn’t remarried and continues to use the same home as a primary residence. If the surviving spouse later moves, the dollar amount of the exemption from the prior homestead carries over to the new property.9State of Texas. Texas Tax Code Title 1 Subtitle C Chapter 11 Subchapter B Section 11-131 – Residence Homestead of 100 Percent or Totally Disabled Veteran Veterans with disability ratings below 100% may qualify for a partial exemption under Tax Code Section 11.22, with the amount varying by disability percentage.
The 10% Appraisal Cap on Your Homestead
Even when the real estate market is surging, your homestead’s appraised value for tax purposes cannot increase by more than 10% per year, plus the value of any new construction or additions. Tax Code Section 23.23 imposes this cap, which limits how fast the appraisal district can push your taxable value up to match rising sale prices in your neighborhood.10State of Texas. Texas Tax Code TAX 23-23 The cap kicks in on January 1 of the tax year after you first qualify for the homestead exemption, so new homeowners wait one year.
In fast-growing metros like Austin, Dallas, and Houston, market values have sometimes jumped 20% or more in a single year. Without the cap, your tax bill would follow those swings directly. With it, the assessed value catches up to market value gradually. If you’ve owned your home for several years in a hot market, the gap between your capped assessed value and actual market value can be substantial, and that difference is real money off your bill every year.
Protesting Your Appraisal
If your appraised value looks inflated, you have the right to challenge it, and this is often where homeowners can save money independent of what the legislature does. File a written notice of protest with your county’s appraisal review board (ARB) by May 15 or 30 days after the appraisal district mailed your notice of appraised value, whichever is later.11State of Texas. Texas Tax Code TAX 41-44 – Notice of Protest Miss the deadline and you’re stuck with the appraisal for the year.
Once you file, the ARB schedules a hearing. Before the hearing, you and the appraisal district exchange copies of any evidence you plan to present, and you submit a written affidavit along with your evidence. Useful documentation includes recent comparable sales in your neighborhood, photos of condition issues the appraiser may not have seen, a fee appraisal, or repair estimates for deferred maintenance.12Texas Comptroller of Public Accounts. Property Tax Protest and Appeal Procedures Evidence can be submitted on paper or on a portable device like a USB drive. In most cases, the appraisal district carries the burden of proving its value is correct.
If the ARB rules against you, you can appeal to state district court or pursue binding arbitration for properties under certain value thresholds. Even a modest reduction compounds, since the 10% cap uses your current assessed value as the starting point for the next year’s limit.
Deferral Option If You Can’t Pay
If you’re 65 or older or disabled and the bill is still unaffordable, Texas law allows you to defer all property tax collection on your homestead indefinitely. You file an affidavit with your county’s appraisal district, and as long as you own and live in the home, no taxing unit can file a delinquency suit against you. The taxes don’t disappear. They accumulate as a lien against the property and accrue interest at 5% per year rather than the steep penalty schedule that applies to ordinary delinquencies.13State of Texas. Texas Tax Code TAX 33-01 – Penalties and Interest The full balance comes due when you sell, move out, or pass away.
Where Full Elimination Stands
School district taxes make up the largest slice of most Texas property tax bills, and the legislature has been systematically shrinking them. Senate Bill 2 from the 88th Legislature’s second special session in 2023 directed roughly $18 billion from the state’s budget surplus toward cutting school district tax rates through a mechanism called tax compression: the state sends money directly to districts so they can lower what they charge homeowners without losing classroom funding.14Texas Legislature Online. SB 2 – Committee Report (Unamended) – Bill Analysis
Compression targets the maintenance and operations (M&O) portion of the school tax, which pays for teacher salaries, supplies, and day-to-day operations. The interest and sinking (I&S) portion, which pays off voter-approved bonds for school buildings, is untouched. The 89th Legislature in 2025 continued the trajectory with further M&O reductions, and the long-term stated goal from key legislators is to push the M&O rate to zero, which would end school district property taxation for operations while still allowing I&S collections for capital projects voters have already approved. Reaching zero depends on the state having enough surplus revenue each session to keep buying down local rates, which isn’t guaranteed when oil prices dip or the economy slows. Even if that goal is reached, the constitutional ban would still be the only true property tax prohibition on the books, and it would still apply only to the state.