Texas Property Tax Reductions: Exemptions, Protests, and Arbitration

The fastest way to lower your Texas property taxes is to attack the appraised value your bill is calculated from, because local school districts, counties, cities, and special districts set their rates by budget and you can’t negotiate those. You can, however, strip value off your property through exemptions, special valuations for land and small-business equipment, and a formal protest when the appraisal district’s number is too high. Two of these levers got meaningfully bigger for 2026: the school district homestead exemption climbed to $140,000, and the business personal property exemption jumped from $2,500 to $125,000.

Claim the Homestead Exemption

If you own your home and live in it as your primary residence, the general homestead exemption removes $140,000 from your home’s appraised value for school district taxes.¹ Texas voters raised the amount from $100,000 through Proposition 13 in November 2025. On a $350,000 home, that single exemption cuts roughly $1,400 to $1,800 off the school portion of your bill, depending on your district’s rate.

Counties and cities can stack their own optional homestead exemptions on top. Local amounts vary: a flat dollar figure of at least $3,000, or up to 20 percent of appraised value.¹ Ask your county appraisal district what’s available in your taxing units, because the savings differ sharply across jurisdictions.

Bought a home mid-year? You don’t have to wait until next January. If the previous owner didn’t already claim the exemption for that tax year, you can get a prorated general homestead exemption for the portion of the year you lived there.² This mid-year option has been in place since 2022.³

Use the 10 Percent Appraisal Cap

Separate from the dollar exemption, Texas law caps how fast your homestead’s appraised value can climb. The appraisal district cannot raise the appraised value by more than 10 percent per year over the prior year, plus the value of any new improvements.⁴ When comparable sales push market value up 25 or 30 percent in a hot year, the cap is what keeps your tax bill from doing the same.

The cap begins after you’ve owned and occupied the home with a homestead exemption for at least one full calendar year starting January 1.³ Ordinary maintenance like a roof replacement or repainting doesn’t count as a new improvement and won’t reset the cap.⁴ The cap only limits appraised value; it doesn’t restrain tax rate increases from your local taxing units.

Over-65 and Disability Exemptions

Homeowners who are 65 or older, or who have a qualifying disability, get an extra $60,000 off appraised value for school taxes on top of the $140,000 general exemption.¹ The first $200,000 of appraised value is exempt from school district taxes for a qualifying homeowner. Local jurisdictions can add their own amounts.

Qualifying also triggers a school tax ceiling. Once you qualify, your school tax bill is locked at the amount you paid in the qualifying year, and it stays flat even as your home’s value rises. The ceiling only moves if you add improvements that increase value. Move to a new Texas homestead, and you can transfer a proportional version of the ceiling to the new property. Cities and counties can adopt their own freezes, but aren’t required to.

Disabled Veteran and Surviving Spouse Exemptions

Veterans with a service-connected disability rated by the VA get a partial exemption on any single property they own in Texas, scaled to the rating:⁵

10% to under 30% disability: $5,000 off appraised value
30% to under 50%: $7,500
50% to under 70%: $10,000
70% or higher: $12,000

Veterans rated 100 percent disabled or classified as individually unemployable by the VA qualify for a full exemption from property taxes on their primary residence, from every taxing unit.⁶ A surviving spouse keeps the full exemption as long as they don’t remarry and continue living in the home. If the spouse moves, the exemption transfers as a fixed dollar amount equal to the last year’s exemption on the former home.

The surviving spouse of a service member killed in action also qualifies for a total exemption on their residence, provided they haven’t remarried.⁷ Applications must include VA or military-branch documentation of the disability rating or the circumstances of death.

Agricultural and Wildlife Valuation for Landowners

If your land is used primarily for farming or ranching, you can apply for an agricultural or open-space valuation under Texas Tax Code Chapter 23, Subchapter D. The appraisal district taxes the land on its productive agricultural capacity instead of market value.⁸ On land near a growing city, the gap between the two can be enormous.

The land must have been devoted primarily to agricultural use for at least five of the preceding seven years.⁸ Wildlife management valuation is an alternative, but only for land that already qualified for agricultural valuation, maintained through specific habitat practices like erosion control, predator management, or native vegetation restoration.

Watch the rollback tax. If you convert the land to a non-agricultural use, the appraisal district recalculates what you would have owed at full market value for the prior three years and bills the difference plus interest. That one-time hit can be steep, so weigh the rollback before changing how you use the land.

Disaster Damage Exemption

When the governor declares a disaster area, property owners in the zone can apply for a temporary exemption on damaged improvements, provided the property sustained at least 15 percent physical damage.⁹ The appraisal district assigns a damage level that sets the exemption percentage:

Level I (15% to under 30% damaged): 15% exemption
Level II (30% to under 60%): 30% exemption
Level III (60% to under 100%): 60% exemption
Level IV (total loss): 100% exemption

The exemption applies to the structure, not the land, and is prorated for the days remaining in the tax year after the disaster declaration.⁹ You have 105 days from the declaration date to file Form 50-312 with your appraisal district.¹⁰ Miss that window and you lose the exemption, which is easy to do while dealing with the aftermath.

Small Business Personal Property Exemption

Starting January 1, 2026, the business personal property exemption rose from $2,500 to $125,000.¹¹ If the total market value of your business’s tangible personal property at a single location is $125,000 or less, you owe no property tax on that equipment, inventory, or furnishings.

Businesses under the threshold don’t have to file an annual rendition. Instead, they file a one-time certification on the standard rendition form to claim the exemption.¹¹ Businesses above $125,000 must still file an annual rendition by April 15, and filing late or not at all triggers a 10 percent penalty on taxes owed.¹² Related businesses sharing a location must combine the value of all their personal property when applying the threshold, so splitting an enterprise into separate entities to stay under the cap doesn’t work.

How and When to File

Most homestead exemptions use Form 50-114, the Residence Homestead Exemption Application, available from the Texas Comptroller or your county appraisal district.¹³ You’ll need a Texas driver’s license or state ID with an address matching the property. If they don’t match, you can request a waiver from the chief appraiser. Disability exemption applicants include documentation from the Social Security Administration or a physician. Disabled veterans attach the VA letter showing their rating. If you’re transferring a tax ceiling from a prior homestead, note it on the form.

The standard filing deadline is before May 1 of the tax year.² Miss it and you can still file a late application up to two years after the delinquency date for that year’s taxes.¹⁴ If approved, the district either reduces your bill or refunds taxes you overpaid. Veterans applying for the 100 percent disabled veteran exemption have up to five years after the filing deadline.¹⁵

Protest the Appraised Value

If your appraisal notice looks too high, protest it. The deadline is May 15 or 30 days after the appraisal district mails your notice, whichever is later.¹⁶ The clock starts on the mailing date, not the day you open the envelope.

Most protests begin with an informal meeting with a district appraiser. Useful evidence: a recent closing statement if you just bought, photos of damage or deferred maintenance, contractor repair estimates, or an independent appraisal. If the informal talk doesn’t produce a satisfactory result, the case goes to the Appraisal Review Board for a formal hearing that ends with a binding determination.

The Unequal Appraisal Argument

Most people protest market value, but there’s a second angle that is often stronger: unequal appraisal. The claim is that even if your value reflects the market, it’s disproportionately higher than what the district assigned to comparable homes. The burden is on the appraisal district to show that your appraisal ratio is at or below the median for similar properties.¹⁷

To build this case, divide your property’s appraised value by a recent arm’s-length sale price or independent appraisal to get your ratio, then calculate the same ratio for comparable properties using the district’s data. If yours is higher than the median, you have grounds for a reduction. Request the district’s evidence and sales data in writing before the hearing.

If the ARB Says No: Binding Arbitration

When the ARB ruling still looks wrong, you can request binding arbitration within 60 days of receiving the ARB’s order, as long as no lawsuit has been filed on the same property. For homesteads, there’s no value limit on eligibility; for other property, the ARB-determined value must be $5 million or less.¹⁸ You pay a refundable deposit on filing, and you must have paid the underlying taxes by the delinquency date to be eligible.¹⁹ File through Texas.gov/propertytaxarbitration, or on paper to the Comptroller if you’re not represented by an agent. The alternative is a lawsuit in district court.

If You Can’t Pay the Bill in Full

Paying late isn’t a way to lower your taxes. Unpaid balances become delinquent February 1 and start accruing a 6 percent penalty plus 1 percent interest, climbing monthly.²⁰ If cash flow is the problem, set up an installment agreement with your local tax office; plans run 12, 24, or 36 months. For homestead properties, entering an agreement prevents the additional collection attorney penalty, though 1 percent monthly interest keeps accruing.²¹

1
State of Texas. Texas Tax Code Section 11.13 – Residence Homestead
2
Texas Comptroller of Public Accounts. Property Tax Exemptions
3
Travis Central Appraisal District. Are You Eligible for a Pro-Rated Homestead Exemption?
4
State of Texas. Texas Tax Code Section 23.23 – Limitation on Appraised Value of Residence Homestead
5
State of Texas. Texas Tax Code Section 11.22 – Disabled Veterans
6
State of Texas. Texas Tax Code Section 11.131 – Residence Homestead of 100 Percent or Totally Disabled Veteran
7
Texas Legislature Online. Texas Code – SB 163
8
Caldwell County Appraisal District. Texas Code – Appraisal of Agricultural Land
9
State of Texas. Texas Tax Code Section 11.35 – Temporary Exemption for Qualified Property Damaged by Disaster
10
Guadalupe Appraisal District. Section 11.35 Property Tax Code
11
Fort Bend Central Appraisal District. New BPP Law
12
Harris Central Appraisal District. Appraisal of Business Personal Property
13
Texas Comptroller of Public Accounts. Form 50-114 – Residence Homestead Exemption Application
14
State of Texas. Texas Tax Code TAX 11.431 – Late Application for Homestead Exemption
15
Texas Comptroller of Public Accounts. Residence Homestead Exemptions
16
Texas Comptroller of Public Accounts. Appraisal Protests and Appeals
17
State of Texas. Texas Tax Code Section 41.43 – Protest of Determination of Value or Equal and Uniform Appraisal
18
Texas Comptroller of Public Accounts. Regular Binding Arbitration
19
State of Texas. Texas Tax Code TAX 41A.03 – Request for Arbitration
20
Texas Comptroller of Public Accounts. Penalty Tax Bills
21
Harris County Tax Office. Property Tax Installment Plan