Texas Homestead Exemptions – What You Need to Know

Texas homeowners can reduce their property tax burden through homestead exemptions. These exemptions provide financial relief by lowering the taxable value of a primary residence. Eligibility requirements, application procedures, deadlines, and potential savings vary based on the type of exemption claimed. Mistakes in filing, failure to meet deadlines, or changes in homeownership status can affect eligibility. Understanding the types of exemptions, savings potential, and common pitfalls ensures homeowners maximize their tax benefits while maintaining compliance with state regulations.

What Is a Texas Homestead Exemption?

A Texas homestead exemption reduces a homeowner’s property tax liability by lowering the taxable value of their primary residence. The exemption applies only to the homeowner’s principal residence and provides financial relief by decreasing the amount of property taxes owed. Texas law offers various types of homestead exemptions, including general residence, age-based, disability, and veteran exemptions. According to the Texas Tax Code Section 11.13, homeowners must meet specific eligibility requirements to qualify for these benefits.

How Does a Homestead Exemption Work?

A homestead exemption works by reducing the taxable value of a homeowner’s primary residence, which lowers the total property tax owed. The exemption applies only to properties that serve as the owner’s primary residence as of January 1 of the tax year.

The Texas Property Tax Code Section 11.13 mandates that school districts must provide a $100,000 exemption on a home’s appraised value for property tax calculations. Local governments, including counties, cities, and special districts, may offer additional exemptions, typically ranging from 10% to 20% of a home’s value.

For example, if a home is appraised at $300,000 and qualifies for a $100,000 school district exemption, the taxable value drops to $200,000, reducing the total tax liability. Homeowners must apply for the exemption through their local appraisal district and meet residency requirements to maintain eligibility.

Types of Homestead Exemptions in Texas

Texas offers multiple homestead exemptions that provide property tax relief based on eligibility criteria. These exemptions reduce the taxable value of a primary residence, lowering the total property tax burden. The Texas Tax Code Section 11.13 outlines the following exemptions:

1. General Residence Homestead Exemption – Homeowners receive a mandatory $100,000 exemption on school district taxes for their primary residence. Other taxing units may offer additional percentage-based exemptions.
2. Over-65 Exemption – Homeowners aged 65 or older qualify for an additional $10,000 exemption on school district taxes. Local governments may provide further reductions. This exemption is portable, meaning it can transfer to a new residence within Texas.
3. Disabled Person Exemption – Homeowners with a disability that prevents gainful employment qualify for an additional $10,000 exemption on school district taxes. This exemption cannot be combined with the over-65 exemption.
4. Disabled Veteran Exemption – Veterans with a service-connected disability rating from the U.S. Department of Veterans Affairs may receive a 100% exemption on property taxes if they are 100% disabled or unemployable. Partial exemptions apply based on disability percentage:

• 10%-29% disability – $5,000 exemption
• 30%-49% disability – $7,500 exemption
• 50%-69% disability – $10,000 exemption
• 70%-100% disability – $12,000 exemption

Each exemption requires an application through the local county appraisal district and must meet residency and eligibility requirements.

Who Qualifies for a Homestead Exemption?

A homeowner qualifies for a homestead exemption if they meet the following requirements under Texas Tax Code Section 11.13:

1. Primary Residence Requirement – The property must be the applicant’s primary residence as of January 1 of the tax year. Rental properties, vacation homes, and investment properties do not qualify.
2. Ownership Requirement – The homeowner must have a legal ownership interest in the property. A contract for deed or life estate may also qualify.
3. Residency Proof – The applicant must provide a valid Texas driver’s license or state-issued ID with an address that matches the homestead property.
4. Age or Disability for Additional Exemptions –

• Homeowners 65 years or older qualify for an extra $10,000 school district exemption.
• Homeowners with a medically verified disability that prevents them from working qualify for a $10,000 exemption but cannot combine it with the over-65 exemption.

• Veterans with a service-connected disability qualify for property tax reductions based on disability percentage.
• Surviving spouses of veterans, first responders, or senior homeowners may qualify if they do not remarry and continue living in the homestead.

Homeowners must apply through their county appraisal district and submit proof of eligibility to receive the exemption.

How Much Money Can You Save?

The amount of money a homeowner can save with a Texas homestead exemption depends on the exemption type, local tax rates, and the appraised property value. Texas Tax Code Section 11.13 outlines the savings homeowners can expect:

1. General Residence Homestead Exemption – Homeowners receive a $100,000 reduction in taxable value for school district taxes.

• Example: A home valued at $300,000 would be taxed as if it were $200,000, reducing school taxes significantly.

• Example: A senior homeowner with a $300,000 home would have a taxable value of $190,000 after both exemptions.

• 10%-29% disability – $5,000 exemption
• 30%-49% disability – $7,500 exemption
• 50%-69% disability – $10,000 exemption
• 70%-100% disability – $12,000 exemption
• 100% disability or unemployability – Total exemption (no property taxes owed).

Example Savings Calculation

• Home Value: $300,000
• School Tax Rate: 1.5%
• General Exemption: $100,000 → Taxable Value: $200,000
• Over-65 Exemption: $10,000 → Taxable Value: $190,000
• Tax Savings: $100,000 x 1.5% = $1,500 saved per year

Savings vary by county, so homeowners should check with their local appraisal district for exact figures.

How to Apply for a Homestead Exemption

Homeowners must apply for a homestead exemption through their county appraisal district to receive property tax reductions. The application process follows these steps:

1. Determine Eligibility – The homeowner must meet the primary residence requirement and own the property as of January 1 of the tax year. A Texas driver’s license or state ID with the homestead’s address is required.
2. Obtain the Application Form – The Residence Homestead Exemption Application (Form 50-114) is available online through the Texas Comptroller’s website or the local county appraisal district office.
3. Complete the Application – The homeowner must provide:

• Personal information (name, address, contact details).
• Property details (legal description, appraisal district number).
• Type of exemption requested (general, over-65, disabled, veteran, surviving spouse, or agricultural).

• A copy of their Texas driver’s license or state ID (address must match the homestead property).
• Proof of disability (if applicable) – A letter from the Social Security Administration (SSA) or the Veterans Affairs (VA) confirming disability status.

Once approved, the homestead exemption remains in effect as long as the homeowner meets eligibility requirements. No annual renewal is required unless the homeowner moves or becomes eligible for additional exemptions.

What Is the Deadline for Filing?

The deadline for filing a homestead exemption application in Texas is April 30 of the tax year. Homeowners must submit the completed application to their county appraisal district by this date to qualify for the exemption.

Late applications may be accepted if filed within two years after the delinquency date of the property taxes. If a homeowner qualifies for an exemption due to age (65 or older) or disability, they can apply at any time during the year. The exemption will be retroactively applied to the date they became eligible.

For homeowners who purchase a new home, the homestead exemption can be applied for immediately, but it will take effect the following tax year.

What Happens If I Miss the Deadline?

A homeowner who misses the April 30 deadline for filing a homestead exemption may still apply for the exemption within two years after the delinquency date of the property taxes. The exemption will be applied retroactively to reduce the taxable value for the missed years.

For homeowners 65 or older or those with a disability, the exemption can be claimed at any time and will take effect from the date of eligibility. However, failing to file within the allowed time frame may result in higher property tax payments until the exemption is processed.

Homeowners should contact their county appraisal district to confirm eligibility for late filing and ensure all required documents are submitted.

Do I Have to Reapply Every Year?

No, homeowners do not have to reapply for a homestead exemption every year. Once approved, the exemption remains in place as long as the homeowner continues to meet the eligibility requirements.

A new application is required if:

1. The homeowner moves to a new primary residence – A homestead exemption does not transfer between properties. A new application must be submitted for the new home.
2. The ownership structure changes – If the property is placed in a trust, divided among family members, or refinanced in a way that alters ownership, the homeowner may need to reapply.
3. The homeowner becomes eligible for additional exemptions – Those who turn 65 years old, become disabled, or qualify for veteran exemptions must submit a new application to claim additional benefits.
4. The appraisal district requests verification of eligibility – In some cases, a county appraisal district may require updated documentation to confirm that the homeowner still qualifies.

Failure to notify the county appraisal district of changes in eligibility may result in penalties or back taxes if the exemption is incorrectly applied.

Common Mistakes to Avoid When Applying

Applying for a homestead exemption can reduce property taxes, but mistakes in the application process may result in delays or denial. Homeowners should avoid the following errors:

1. Using an Incorrect Address – The name and address on the homestead exemption application must match the address on the homeowner’s Texas driver’s license or state-issued ID. Any discrepancies can lead to rejection.
2. Applying for Multiple Homestead Exemptions – A homeowner can only claim one homestead exemption at a time. Filing for exemptions on multiple properties is a violation of the Texas Tax Code and may result in fines or tax penalties.
3. Missing the Filing Deadline – The April 30 deadline must be met to receive the exemption for the current tax year. Late applications may be accepted, but missing the deadline can delay tax savings.
4. Failing to Submit Required Documents – The application must include a valid Texas ID with the property’s address. Applicants for disability exemptions must provide supporting documents from the Social Security Administration (SSA) or Veterans Affairs (VA).
5. Incorrectly Claiming an Exemption – Homeowners who claim an exemption for which they do not qualify, such as a senior or disabled exemption without proper proof, may have the exemption denied or revoked.
6. Not Updating the Exemption After Moving – A homestead exemption does not automatically transfer to a new home. Homeowners must reapply after purchasing a new primary residence.
7. Ignoring Requests from the Appraisal District – Some county appraisal districts may request periodic verification of homestead exemption status. Failing to respond could result in the removal of the exemption.
8. Failing to Claim Additional Exemptions – Homeowners who qualify for over-65, disability, or disabled veteran exemptions must submit a separate application to receive extra tax reductions.

Avoiding these mistakes ensures a smooth application process and maximizes property tax savings. Homeowners should verify their exemption status with their county appraisal district to prevent unnecessary tax liabilities.

What Happens If I Move or Sell My Home?

A homestead exemption does not automatically transfer when a homeowner moves or sells their property. The following rules apply:

1. Selling a Home – When a home is sold, the homestead exemption remains in effect for that tax year. The new owner must apply for their own exemption for the following year. Property taxes are usually prorated at closing, but the exemption benefits stay with the original owner until the year ends.
2. Buying a New Home – A homeowner who moves to a new primary residence must file a new homestead exemption application with the county appraisal district where the new home is located. The exemption does not transfer between properties.
3. Over-65 or Disability Exemption Portability – Homeowners who qualify for an over-65 or disability exemption can transfer the percentage of school tax savings from their previous home to their new home. This benefit applies anywhere in Texas but requires a new application.
4. Property Ownership Changes – If a property is transferred due to inheritance, marriage, divorce, or placing it in a trust, the new owner must confirm eligibility and may need to reapply for the exemption.
5. Deadline for Filing After Moving – A new homestead exemption must be filed by April 30 of the tax year after purchasing the new home. If the homeowner moves mid-year, the exemption will take effect the following tax year.
6. Homestead Cap Reset – Moving to a new home resets the homestead cap on property value increases. In Texas, a homestead exemption limits annual taxable value increases to 10% per year, but this benefit does not carry over to a new home.

Homeowners should notify their county appraisal district when they move to ensure their exemption is properly updated and applied.

Can You Have More Than One Homestead Exemption?

No, a homeowner can only have one homestead exemption at a time. The Texas Tax Code Section 11.13 states that a homestead exemption applies only to a homeowner’s primary residence. A person cannot claim a homestead exemption on multiple properties, including vacation homes, rental properties, or secondary residences.

Exceptions apply for:

1. Spouses with Separate Primary Residences – If spouses live apart due to legal separation, each may claim a homestead exemption on their respective primary residences.
2. Inherited Property – If a homeowner inherits a property with an existing homestead exemption, they must live in the home as their primary residence to maintain the exemption.

Filing multiple homestead exemptions on different properties can result in penalties, back taxes, and legal consequences from the county appraisal district.

Can You Lose Your Homestead Exemption?

Yes, a homeowner can lose their homestead exemption if they no longer meet eligibility requirements. Common reasons for losing an exemption include:

1. Selling or Moving from the Home – A homestead exemption remains in effect only if the homeowner continues to live in the property as their primary residence. If the homeowner moves, the exemption is removed the following tax year.
2. Failure to Update Address on ID – The Texas Comptroller requires the homeowner’s driver’s license or ID to match the homestead address. If the address does not match, the exemption may be revoked.
3. Property Ownership Changes – If the home is transferred into a business name, placed in certain types of trusts, or inherited without proper documentation, the exemption may be lost.
4. Rental or Commercial Use of the Home – If a homestead property is rented out or used for business purposes, the exemption can be removed. Partial exemptions may apply if only a portion of the home is used for business.
5. Failure to Respond to County Appraisal Requests – Some county appraisal districts require periodic verification of eligibility. Failure to respond may result in the exemption being revoked.

Homeowners should report changes to their county appraisal district to avoid penalties and ensure continued eligibility.

Additional Texas Property Tax Exemptions

Texas offers several property tax exemptions beyond the homestead exemption. These exemptions help reduce taxable property values for qualified homeowners.

1. Over-65 Exemption – Homeowners 65 years or older receive an additional $10,000 exemption on school district taxes. Some local governments offer extra tax reductions.
2. Disabled Person Exemption – Homeowners with a disability that prevents full-time employment qualify for a $10,000 exemption on school district taxes. This exemption cannot be combined with the over-65 exemption.
3. Disabled Veteran Exemption – Veterans with a service-connected disability qualify for tax reductions based on disability rating. A 100% disabled veteran pays no property taxes on their homestead.
4. Surviving Spouse Exemption – The surviving spouse of a disabled veteran, first responder, or over-65 homeowner may receive a property tax exemption if they remain in the home and do not remarry.
5. Agricultural or Open-Space Exemption – Property used for farming, ranching, or timber production qualifies for a lower tax valuation based on land use rather than market value.
6. Solar and Energy Efficiency Exemption – Homeowners who install solar panels, wind energy devices, or rainwater harvesting systems may qualify for a property tax exemption on the added value from these improvements.

Homeowners should check with their county appraisal district to determine eligibility for additional exemptions.