Texas Homestead Exemption

Quick Facts

• General exemption: As of 2023, Texas voters approved Proposition 4 increasing the school district homestead exemption to $100,000 of a home’s appraised value, significantly lowering school property taxes.
• Additional relief: Counties, cities, and special districts may offer optional homestead exemptions up to 20% of appraised value (minimum $5,000). Over-65 and disabled homeowners receive an extra $10,000 school tax exemption plus tax ceilings.
• Appraisal cap: Homesteaded properties benefit from a 10% annual limit on appraised value increases (not including new improvements).
• Disabled veterans: Qualify for exemptions ranging from $5,000 to full exemption based on disability rating. Surviving spouses retain benefits under certain conditions.
• Application window: File Form 50-114 between January 1 and April 30 of the tax year, or up to two years after the delinquency date.

Program Overview

Texas relies heavily on property taxes to fund schools and local services. The homestead exemption reduces taxable value, and recent reforms expanded relief. Appraisal districts administer applications, while the Comptroller provides statewide forms and guidance. Once approved, the exemption remains as long as the property is your primary residence, but you must notify the appraisal district if you move or no longer qualify.

Eligibility Requirements

Residence Criteria

• You must own and occupy the property as of January 1. Ownership can be fee simple, community property, or life estate. Trust-held properties qualify if the trustor/beneficiary occupies the home.
• Provide Texas driver’s license or state ID with the homestead address. Vehicle registration must also match. Non-U.S. citizens must provide documentation of legal residency.
• Only one homestead exemption per family is allowed. Claiming exemptions in multiple jurisdictions can result in penalties.

Additional Exemptions

• Age 65 or older: Additional $10,000 school tax exemption plus optional local exemptions. School taxes are frozen (tax ceiling) at the amount paid in the first year you qualify. Surviving spouses 55+ maintain the ceiling.
• Disabled persons: Equivalent benefits to over-65 exemption. Provide Social Security disability award or physician’s certificate.
• Disabled veterans: Exemptions scale with disability rating: 10–29% ($5,000), 30–49% ($7,500), 50–69% ($10,000), 70–100% (full exemption). Veterans with 100% disability receive full exemption on residence homestead. Surviving spouses of disabled veterans and first responders killed in the line of duty may qualify for complete exemption.
• Donated residence homesteads: 100% exemption for homes donated to disabled veterans by charitable organizations.
• Temporary exemptions for disaster damage: Properties damaged by 15% or more in a declared disaster can claim temporary exemptions during repairs.

Application Process

1. Collect documents: Texas driver’s license/ID, vehicle registration, property deed, and supporting documentation (age, disability, military). Ensure IDs show homestead address.
2. Complete Form 50-114: Available from the appraisal district or the Comptroller’s website. Include property description, applicant information, and declarations about other exemptions.
3. Submit to appraisal district: File in person, by mail, or electronically where available. Keep copies and request acknowledgement.
4. Optional forms: Use Form 50-114A for age/disability, Form 50-135 for disabled veterans, and local forms for disaster or donated home exemptions.
5. Approval: Appraisal district issues written determination. If denied, you may protest to the Appraisal Review Board (ARB).
6. Renewal: Automatic, provided you remain eligible. Notify the district if you move, rent the property, or change mailing address.

Appraisal Cap and Tax Ceilings

• Homestead appraisal increases are capped at 10% annually plus improvements. Monitor appraisal notices each spring to ensure compliance.
• Over-65 and disabled exemptions establish a school tax ceiling; some cities/counties also freeze taxes. If you make improvements, the ceiling adjusts for the added value.
• Tax ceilings transfer to surviving spouses (age 55+) and to new homes if you downsize, using prorated calculations. File with the appraisal district to port the ceiling.

Strategies for Maximizing Relief

• File early: Submit applications immediately after January 1 to ensure exemption applies to current year bills.
• Appeal valuations: Even with exemptions, high appraisals raise taxes. File protests by May 15 or 30 days after appraisal notice to challenge value or unequal appraisal.
• Stack local options: Check with your city, county, and special districts (e.g., hospital, community college) for optional exemptions. Some grant 20% reductions or flat-dollar relief.
• Coordinate with escrow: Provide approval letter to your mortgage servicer to adjust escrow payments and avoid overages.
• Monitor residency documentation: Keep identification updated with homestead address. If you move temporarily (e.g., military deployment), maintain documentation of intent to return.

Interaction with Other Programs

• Property tax deferral: Over-65 or disabled homeowners can defer taxes until property transfer using Form 50-126. Interest accrues at 5% annually.
• Tax installment plans: Local tax collectors offer installment plans for disaster victims or taxpayers with hardships.
• Energy efficiency incentives: Combine property tax relief with utility rebates and state energy programs to lower housing costs further.
• School district tax rate compression: Monitor legislative changes affecting tax rates; exemptions apply to compressed rates as well.

Example Scenarios

• Houston homeowner: Ms. Garcia claims the $100,000 school exemption and a 20% Harris County optional exemption, reducing taxable value by $140,000. She also files an appraisal protest, lowering her assessed value by another $25,000.
• San Antonio retiree: Mr. Lopez turns 65, securing the additional $10,000 school exemption and a tax ceiling. His taxes remain stable even as appraised value increases 8% annually.
• Disabled veteran in Dallas: Sgt. Chen, rated 100% disabled, files Form 50-135 and receives a full exemption, eliminating property taxes. His surviving spouse will retain the exemption if she does not remarry and continues residing in the home.

Frequently Asked Questions

• Do I need to reapply each year? No. The exemption continues automatically. Notify the appraisal district of changes in ownership or residency.
• Can I rent part of my home? Renting a portion typically does not affect the exemption if you continue to occupy the property as your residence. Renting the entire home may void the exemption.
• What if my ID doesn’t show the homestead address yet? Submit updated ID within 30 days or provide supporting documentation (e.g., utility bills) and follow up with the appraisal district.
• How far back can I claim the exemption? You may apply up to two years after the delinquency date for retroactive relief.
• What if my application is denied? File a protest with the ARB within 30 days of denial or by May 15, whichever is later. Provide evidence of residency and eligibility.

Additional Resources

• Texas Comptroller – Residence Homestead Exemption FAQ
• Form 50-114 Application for Residence Homestead Exemption
• Disabled Veteran Exemption Forms
• Property Taxpayer Remedies Guide
• Texas Veterans Commission Benefits