What Is the Texas Homestead Exemption?
The Texas homestead exemption reduces the taxable value of your primary residence for property tax purposes. In 2023, Texas voters approved increasing the general homestead exemption to $100,000 off your home's appraised value for school district taxes — the largest chunk of most Texas property tax bills. It's one of the most valuable tax benefits available to Texas homeowners, but you must apply for it.
Types of Homestead Exemptions in Texas
The General Homestead Exemption reduces appraised value by $100,000 for school district taxes. The Over-65 Exemption provides an additional $10,000 reduction plus a tax ceiling — your school district tax can't increase as long as you live in the home. Disabled persons qualify for the same additional exemption as those over 65. Disabled Veterans receive partial to full exemptions depending on disability rating — 100% disabled veterans pay no property taxes.
How Much Can You Save?
On a $400,000 home with a combined tax rate of 2.2%, without the exemption you'd pay $8,800/year. With the $100,000 general exemption on the school portion (~1.0%), you save approximately $1,000/year — ongoing, every year you stay in the home.
When to Apply
Texas changed the law in 2022 to allow buyers to apply in the same year they purchase — you no longer have to wait until January 1 of the following year. The deadline to apply for a given tax year is April 30. Apply as soon as possible after closing.
How to Apply
Download the application from your county appraisal district website, complete the form with your property address and legal description, provide proof of residency (Texas driver's license showing the property address), and submit to the county appraisal district. The application is free and only needs to be filed once — it renews automatically each year.
Important Rules
You can only claim one homestead, the home must be your principal residence on January 1, your Texas driver's license must show the property address, and renting out the entire home disqualifies it as a homestead.
KAT Realty Reminds Every Buyer Client to File
We send a post-closing follow-up with homestead exemption instructions to every buyer we represent. Our flat fee of $4,999 covers full service from offer to after closing.
