Texas homeowners can lower their tax bills through two levers: the exemptions and caps built into the Tax Code, and the annual protest process for challenging an inflated appraised value. Used together, Texas property tax exemptions and protests are the main tools a homeowner has against a bill driven by some of the highest effective property tax rates in the country, roughly 1.40 percent on owner-occupied homes as of 2024.
Nothing here happens automatically. You file for the exemptions, you file the protest, and you watch the deadlines. Miss them and you pay full freight.
The Residence Homestead Exemption
The residence homestead exemption is the single biggest saver. As of the 2025 update to the Tax Code, $140,000 of your home’s appraised value is completely shielded from school district taxation. School taxes are usually the largest slice of a Texas property tax bill, so this exemption does most of the work.
The current figure grew out of Senate Bill 2 during the 88th Legislature’s second called session in 2023, which raised the school-district homestead exemption from $40,000 to $100,000 under the Property Tax Relief Act. Voters locked the change into the Texas Constitution through Proposition 4 in November 2023, and the legislature has since raised the exemption further to $140,000.
You claim it by filing an application with your local appraisal district. Once a general homestead exemption is on record, most districts do not require you to reapply each year, though you should verify each new appraisal notice to confirm the exemption is actually being applied.
Extra Exemptions for Seniors, Disabled Homeowners, and Disabled Veterans
Homeowners aged 65 or older and those with qualifying disabilities receive an additional $60,000 exemption from school district taxes on top of the $140,000 base, bringing their combined school-district exemption to $200,000. They also get a school tax ceiling, sometimes called a tax freeze, that locks in a maximum dollar amount of school taxes once they turn 65 or qualify as disabled. Property values can keep climbing, but the school tax bill cannot exceed that ceiling unless the homeowner adds new improvements.
Veterans rated 100 percent disabled by the U.S. Department of Veterans Affairs receive a total exemption from property taxes on their residence homestead under Tax Code Section 11.131. A surviving spouse can continue receiving the exemption as long as they do not remarry.
The 10 Percent Appraisal Cap on Homesteads
Exemptions shield a dollar amount. The homestead appraisal cap, under Texas Tax Code Section 23.23, controls how fast the rest of your home’s value can be taxed. The appraisal district cannot raise a homestead’s appraised value by more than 10 percent per year, plus the value of any new construction.
The cap kicks in on January 1 of the year after you first qualify for the homestead exemption and continues as long as you or a surviving spouse keeps qualifying. In a hot market, this matters. If market value jumps 30 percent, the district must still use the capped value for tax purposes, and the gap between market value and capped value can widen year after year.
Two things reset the cap. Selling the home resets it for the new buyer, who starts from full market value. And the cap does you no good until the homestead exemption is filed, so filing promptly after purchasing is the single most important step to lock in this protection.
The 20 Percent Cap on Non-Homestead Property
Owners of rental homes, small commercial buildings, and other non-homestead real estate had no appraisal cap at all until recently. SB 2 introduced a temporary “circuit breaker” under Tax Code Section 23.231 that limits annual appraisal increases on non-homestead properties valued at $5 million or less to 20 percent per year. The protection took effect January 1, 2024 and applies to the 2024, 2025, and 2026 tax years.
This cap expires on December 31, 2026 unless the legislature extends it. If lawmakers do not act, the 2027 tax year could bring a sharp correction for properties held below market value by the cap. Investors and small-business owners should track the next session accordingly.
Deadlines for Filing Exemptions
The standard filing deadline for a residence homestead exemption is April 30. Miss that window and you can still file a late application up to two years after the date taxes became delinquent for that year, which is typically February 1 of the following year.
For the over-65 or disability exemption, you have until one year after the date you first qualify. That gives homeowners who turn 65 mid-year, or who receive a disability determination, some breathing room. Disabled veterans seeking the 100 percent exemption should file as soon as they receive their VA rating, since the exemption can eliminate the property tax bill completely.
Most appraisal districts accept applications online.
Filing a Property Tax Protest
If your appraised value looks too high or your exemptions are not showing up correctly, the annual protest is your remedy. The appraisal district must send you a Notice of Appraised Value by April 1 for homestead properties, or by May 1 for other property. That notice shows both the market value and the appraised value assigned to your property.
Your protest deadline is the later of May 15 or 30 days after the notice was delivered. File using the official Notice of Protest form (Comptroller Form 50-132 for counties over 120,000 population, or Form 50-132-A for smaller counties). Most districts offer electronic filing through their online portals, and mailing by certified mail also works.
Building Your Evidence
Evidence decides the protest. The two most common grounds are that the market value is wrong, meaning comparable nearby sales show your home is worth less than the appraised value, or that the appraisal is unequal, meaning your home is appraised higher than similar properties in the same area. Pick one and build around it.
Comparable sales data is the strongest single argument. Documentation of property defects, such as foundation problems, water damage, or outdated systems, also supports a lower valuation. Photographs and contractor repair estimates make the case concrete. A professional appraisal costs roughly $250 to $1,200 depending on the property and provides the most authoritative evidence, though it is not required.
The Hearing and Your Options After
After you file, the appraisal district typically schedules an informal meeting with a staff appraiser. Most protests get resolved there. Walk through your evidence, negotiate, and sign a settlement if the appraiser agrees to a lower value.
If the informal meeting produces no agreement, the case moves to a formal hearing before the Appraisal Review Board, a panel of appointed citizens. You present evidence, the district explains its valuation, and the board issues a binding decision called the Order Determining Protest. The hearing follows a structured format but is less formal than a courtroom.
If the board’s decision still feels wrong, you have two further options. Binding arbitration is faster and cheaper. You must file within 60 days of receiving the board’s order, and the property’s board-determined value generally cannot exceed $5 million, though no value limit applies to residence homesteads. The deposit depends on the property’s value and type:
- Homestead valued at $500,000 or less: $450
- Homestead valued over $500,000: $500
- Non-homestead valued at $1 million or less: $500
- Non-homestead valued $1–2 million: $800
- Non-homestead valued $2–3 million: $1,050
- Non-homestead valued $3–5 million: $1,550
The deposit must be paid by cashier’s check or money order payable to the Comptroller of Public Accounts. Personal checks and cash are not accepted. The alternative is filing an appeal in state district court, which is more expensive and time-consuming but may be necessary for high-value properties or complex disputes.
What Happens If You Pay Late
Property taxes are due by January 31. A tax lien attaches to every property on January 1, and unpaid taxes become delinquent on February 1. The penalty and interest structure under Tax Code Section 33.01 escalates quickly:
- February 1: 6 percent penalty plus 1 percent interest, for 7 percent total
- March through June: an additional 1 percent penalty and 1 percent interest each month
- July 1: total penalty jumps to 12 percent regardless of how many months taxes have been delinquent, plus cumulative interest
In July the account is typically referred to a collections attorney, which adds up to 20 percent of the total tax owed in attorney fees. A homeowner who lets taxes go unpaid through the summer can face a combined surcharge exceeding 40 percent of the original bill. Penalty, interest, and fees keep accruing monthly.
Foreclosure can begin after one year of unpaid taxes. Once a collections attorney is involved, the homeowner may receive a foreclosure notice giving 21 days to respond before the property is sold at a tax sale. The timeline is aggressive compared to mortgage foreclosure.
Deferrals and Installment Payments
Two safety nets exist for homeowners aged 65 or older, those with disabilities, and qualifying disabled veterans. Both must be used before or at the delinquency date, not retroactively.
The first is a tax deferral. By filing an affidavit with the chief appraiser, an eligible homeowner can defer property tax collection on their residence homestead indefinitely. The tax lien remains on the property and interest accrues at 5 percent annually instead of the standard penalty rates, but no foreclosure can occur during the deferral. When the homeowner no longer owns and occupies the home as their primary residence, all deferred taxes plus interest come due.
The second is a four-installment plan. The same groups can elect to pay their property taxes in four equal installments rather than a single lump sum. The first payment must be made before the February 1 delinquency date along with written notice of intent to use the installment plan. The remaining three payments are due before April 1, June 1, and August 1. Missing an installment triggers a 6 percent penalty and 1 percent monthly interest on the unpaid amount, so the option works only if you can commit to the quarterly schedule.