Texas property tax relief now runs through several stacked mechanisms: a $140,000 homestead exemption from school district taxes, state-funded rate compression that lowers school tax rates, a 10% annual cap on how much your homestead’s taxable value can rise, a temporary 20% cap for many non-homestead properties, and additional exemptions and tax ceilings for seniors, disabled homeowners, and veterans. Most of these benefits require you to file an application with your county appraisal district, and some of the deadlines are strict.
The $140,000 Homestead Exemption
The centerpiece of current relief is the homestead exemption from school district taxes. Under Texas Tax Code Section 11.13, every qualified primary residence gets $140,000 removed from its appraised value before school taxes are calculated.1State of Texas. Texas Tax Code 11.13 – Residence Homestead Voters approved that figure as a constitutional amendment through Senate Bill 4 in the 89th Legislature.2Office of the Texas Lt. Governor. Lt. Gov. Dan Patrick Statement on the Unanimous Passage of Senate Bill 4
If your home is appraised at $350,000, you pay school district taxes on $210,000. A home appraised at or below $140,000 owes nothing in school district maintenance and operations taxes, though the voter-approved enrichment rate and taxes from cities, counties, and other entities still apply. The exemption applies only to your primary residence, and you can only claim it on one property.
School District Tax Rate Compression
The exemption shrinks the taxable value; rate compression shrinks the rate applied to whatever value remains. The state uses general revenue to cover part of each school district’s operating budget so districts can lower their tax rate without cutting classroom spending. Senate Bill 2 from the 88th Legislature’s second special session cut each district’s maximum compressed tax rate by $0.107 per $100 of assessed value starting with the 2023-2024 school year.3Texas Legislature Online. Texas Senate Bill 2 – 88th Legislature 2nd Called Session The 89th Legislature added $2.6 billion in further rate cuts for the 2026-2027 biennium.
Compression applies to every property in a district, so a home appraised at $500,000 saves more in dollar terms than one appraised at $200,000, but both see the same percentage cut. You don’t have to apply for it. The lower rate simply shows up on your tax bill.
The 10% Homestead Appraisal Cap
A large exemption doesn’t help much if your appraised value jumps 30% in a year. Texas Tax Code Section 23.23 prohibits the appraisal district from raising your homestead’s appraised value by more than 10% per year, plus the value of any new improvements like an addition or a garage.4State of Texas. Texas Tax Code 23.23 The cap kicks in automatically once your homestead exemption is on file.
A home with a $300,000 appraised value can rise to no more than $330,000 the next year for tax purposes, no matter what the open market says. In fast-growing metros like Austin, Dallas-Fort Worth, and San Antonio, the gap between market value and capped value can grow substantially over time. Selling and buying a new home resets the cap to the new property’s full market value, which is a real cost to moving that many homeowners overlook.
The 20% Cap for Non-Homestead Property
Commercial buildings, rental houses, second homes, and vacant land historically had no protection against appraisal spikes. The 88th Legislature created a “circuit breaker” under Tax Code Section 23.231 that caps annual appraised value increases at 20% for qualifying non-homestead real property below an inflation-adjusted value threshold.5State of Texas. Texas Tax Code 23.231
The threshold started at $5 million for the 2024 tax year and adjusts annually with the consumer price index. It was $5,160,000 for 2025 and $5,320,000 for 2026.6Bexar Central Appraisal District. Circuit Breaker Limitation on Non-Resident Homestead Property Value Increases Agricultural land, timber land, and property already receiving a homestead exemption are excluded even if the value is below the threshold.7Harris Central Appraisal District. Circuit Breaker Cap You don’t have to apply; the appraisal district applies the limit automatically.
One important boundary: this program sunsets on December 31, 2026. Unless the legislature renews it, the 2027 tax year will use full market values with no 20% ceiling, and a property owner used to the cap could see a large one-year jump.5State of Texas. Texas Tax Code 23.231
Extra Relief for Seniors, Disabled Homeowners, and Veterans
Homeowners who are 65 or older or who have a qualifying disability get an additional $10,000 exemption from school district taxes under Tax Code Section 11.13(c), bringing their total school district homestead exemption to $150,000.8Office of the Texas Lt. Governor. Lt. Gov. Dan Patrick Statement Any taxing unit can also adopt a local option exemption of at least $3,000 for these groups.9Texas Comptroller of Public Accounts. Property Tax Exemptions
Seniors and disabled homeowners also get a tax ceiling, sometimes called a tax freeze. Once you turn 65 or qualify as disabled, the dollar amount you owe in school district taxes is locked at that year’s level. Your appraised value and the tax rate can still change, but your school tax bill will never rise above that original figure. If rates or values fall, you pay the lower amount.
Disabled veterans qualify for exemptions scaled to their VA disability rating:
- 100% disability or individual unemployability: total exemption from property taxes on the veteran’s primary residence under Tax Code Section 11.131.
- 70% to 99% disability: $12,000 exemption.
- 50% to 69% disability: $10,000 exemption.
- 30% to 49% disability: $7,500 exemption.
- 10% to 29% disability: $5,000 exemption.
Veterans with partial ratings can often stack the veteran exemption on top of the standard homestead exemption, though the details vary by county. A veteran who is both 100% disabled and over 65 may qualify for the total exemption that eliminates the property tax bill entirely.
How to File for the Homestead Exemption
You claim the homestead exemption by filing Form 50-114, the Application for Residential Homestead Exemption, with the appraisal district in the county where the property sits.10Texas Comptroller of Public Accounts. Residence Homestead Exemption Application To qualify you must own the home, use it as your primary residence, and not claim a homestead exemption on any other property. Your Texas driver’s license or state ID has to show the same address as the property. There are narrow exceptions for active-duty military and people holding certain special licenses.
The general deadline is before May 1 of the tax year you’re applying for.9Texas Comptroller of Public Accounts. Property Tax Exemptions If you miss it, Texas allows late applications for up to two years after the delinquency date, which is usually February 1 of the following year. So for the 2026 tax year, a late application could still be filed as late as early 2029, but you lose the benefit for every year you delay filing. Once approved, the exemption stays on your property until you move or stop using it as your primary residence. No annual reapplication is required.
How to Protest Your Appraisal
Every exemption in the code depends on the appraisal district having your home’s value in the right ballpark. Filing a protest is free, and it is the single most effective tool an individual homeowner has.
The deadline to file a protest is May 15, or the 30th day after the appraisal district mails your notice of appraised value, whichever is later.11State of Texas. Texas Tax Code 41.44 – Notice of Protest Most people use Form 50-132 (Property Owner’s Notice of Protest) through the Comptroller’s website or the appraisal district’s online portal, though a written statement identifying your property and explaining your disagreement is technically enough.12Texas Comptroller of Public Accounts. Appraisal Protests and Appeals
Most appraisal districts schedule an informal conference before the formal hearing, and this is where the majority of protests resolve. Bring comparable sales for similar homes in your area, photos of any condition problems that hurt value, and your own estimate of fair market value. If no agreement comes out of the informal meeting, you go to a hearing before the Appraisal Review Board, where you and the district each present evidence. You can appear in person, by phone, by video, or by written statement. If the ARB’s written order still doesn’t work for you, you can appeal to district court or, for properties under $5 million, to binding arbitration.
If you miss the deadline, the ARB can grant a late hearing on a showing of good cause, but “I didn’t know” rarely qualifies.12Texas Comptroller of Public Accounts. Appraisal Protests and Appeals Mark the date your appraisal notice arrives and count 30 days.
Payment Deadlines and Delinquency Penalties
Property tax bills go out in October, and payment is due by January 31 of the following year. After that, penalties climb quickly. A tax that is delinquent on February 1 immediately picks up a 6% penalty, and another 1% is added each month it remains unpaid through June.13State of Texas. Texas Tax Code 33.01 – Penalties and Interest On July 1 any remaining delinquent balance jumps to a flat 12% penalty regardless of when it went unpaid. Interest also accrues at 1% per month for as long as the taxes remain unpaid.
County tax offices have no authority to waive these penalties. Homeowners aged 65 or older and those with a qualifying disability can defer their taxes entirely, accruing interest at 6% per year with no penalty, but the deferred amount becomes a lien that must eventually be paid.
Texas also offers a split-payment option: half by November 30 and the balance by June 30 of the following year. If you use that option and miss the second payment, the unpaid portion immediately takes the full 12% penalty.13State of Texas. Texas Tax Code 33.01 – Penalties and Interest