SB 12 Property Tax Freeze: Eligibility, Ceiling Rules, and Filing

The SB 12 property tax freeze in Texas lowers the school district tax ceiling for homeowners who are 65 or older or who meet the state’s definition of disabled, cutting that ceiling automatically each year the school district’s compressed tax rate falls. Before the law took effect, a rate cut passed by the legislature didn’t help these homeowners because their school taxes were already frozen at a set dollar amount. The constitutional amendment that made the mechanism work took effect January 1, 2023, and the reduction now runs each year the compressed rate goes down.¹

Who Qualifies

Two groups of homeowners can claim the school district tax ceiling under Texas Tax Code Section 11.26: those who are 65 or older, and those who meet Texas’s definition of disabled. Texas uses the same disability standard as Social Security, so you qualify if you receive or are eligible for federal disability insurance benefits.²

The property has to be your principal residence on January 1 of the tax year, and you have to own it. It counts as a residence homestead if it’s a structure designed for people to live in, sits on 20 acres or less, and is where you actually live. A mobile home works as long as you own the home and the land, or at least the home itself through a qualifying trust.²

A surviving spouse can keep the ceiling after the qualifying homeowner dies, but only if that spouse was at least 55 at the time of death and the home was already the spouse’s residence homestead. The surviving spouse has to keep living in the home to keep the benefit.³

How SB 12 Lowers Your Ceiling Each Year

When you first qualify for the over-65 or disability homestead exemption, the school district freezes your school taxes at whatever you owed in that first year. That dollar amount becomes your ceiling, and the district can never bill you more than that for school taxes even if your appraised value goes up. SB 12 added a formula that pushes the ceiling down when the state compresses school tax rates.⁴

The formula sits in Section 11.26(a-10). Any year the district’s maximum compressed rate drops below the previous year’s rate, the appraisal district takes your home’s taxable value from the prior year and multiplies it by the difference between the old and new compressed rates. That dollar amount is subtracted from your existing ceiling to produce a new, lower ceiling for the current year.³

Each year’s new, lower ceiling becomes the baseline for the next year. If compressed rates keep dropping, your ceiling keeps ratcheting down. You don’t file anything separate to trigger this. As long as your over-65 or disability exemption is on file, the appraisal district recalculates automatically.

The tax ceiling rides on top of the standard homestead exemption. Every homeowner with a Texas homestead gets a $140,000 exemption from appraised value for school district taxes. If you’re 65 or older or disabled, you get another $60,000 on top of that, for a total of $200,000 in school district exempt value. Claiming the over-65 or disability exemption is what sets the ceiling in the first place.²

Counties and cities can adopt their own additional exemptions and their own ceilings, but the SB 12 compression adjustment is specific to school district taxes. Check with your appraisal district to see whether your county or city has a separate ceiling.

When the Ceiling Can Go Back Up

Improvements can raise the ceiling. If you add to the home beyond routine repairs or government-required upgrades, the district can bump the ceiling in the first year the added value shows up on the appraisal roll. The bump equals the current tax rate multiplied by the value of the improvement. After that one-time increase, the new higher amount freezes again until you make further improvements.³

Rebuilding after damage is treated differently. If a storm, fire, or other casualty forces you to rebuild, the replacement structure generally doesn’t count as an improvement that raises the ceiling. The district can only raise it on a rebuild if the new structure is larger than what was there or uses higher-quality exterior materials.³

Moving to a New Home in Texas

You don’t lose the ceiling by moving. Under Section 11.26(g), if you sell your homestead and buy a new one anywhere in Texas, the school district on the new home has to cap your taxes using a proportional formula. The district figures what your taxes on the new home would have been with no ceiling, then scales that down by the same ratio your old ceiling bore to what your old taxes would have been uncapped.³

If your ceiling on the old house was 60 percent of what your uncapped bill would have been, the same 60 percent ratio applies at the new house. To use it, request a written transfer certificate from the chief appraiser at the appraisal district covering the old home. That certificate carries the numbers the new district needs. Surviving spouses who inherited the ceiling can transfer it too.

How to Apply

File Form 50-114, the Residence Homestead Exemption Application, with the appraisal district in every county where your property sits. The form is on the Texas Comptroller’s site and on most county appraisal district websites.⁵

You’ll need to include:

Your property account number, which appears on prior tax statements or appraisal notices.
A Texas driver’s license or state ID whose address matches the property address. If it doesn’t match, you can ask the chief appraiser to waive that requirement.
Proof of age or disability. For over-65, the date of birth on your ID is usually enough. For disability, include a letter from the Social Security Administration confirming your status.

On the form itself, check the box for “Person Age 65 or Older” or “Disabled Person” under Section 1. If you’re a qualifying surviving spouse, check the “Survivor’s” box and fill in that section. Missing these checkboxes is the most common reason applications stall, because the appraiser won’t set the ceiling without them.⁵

Most appraisal districts take applications by mail or online. Processing runs up to 90 days. Once approved, you’ll get a notice, and the tax assessor-collector will issue a revised statement showing your ceiling. You can also verify the change by pulling your property up on the appraisal district’s website, where the exemption codes and ceiling amount are visible.

Deadlines and Late Filing

The regular filing window is January 1 through April 30 of the tax year you’re claiming. Miss it and you still have options. Texas allows late filing for homestead exemptions, including the over-65 and disability exemptions, up to two years after the delinquency date for that year’s taxes. Because Texas property taxes go delinquent on February 1 of the following year, that gives you close to three years from the start of the tax year to get a late application in.⁶

Filing late doesn’t cost you the exemption, but the ceiling won’t be set until the application clears. You may pay the full amount on an initial bill and get a refund or credit after approval. Filing on time avoids that.

If Paying Is Still a Problem

Section 33.06 offers a separate deferral for homeowners who are 65 or older or disabled. The deferral doesn’t lower what you owe; it postpones collection.⁷

While taxes are deferred, a lien stays on the property and interest accrues at 5 percent a year. No taxing unit can sue or foreclose as long as you continue to own and live in the home. Once you move, sell, or pass away, the taxes come due, and the taxing unit has to wait at least 181 days after sending a delinquency notice before it can collect. A surviving spouse who is at least 55 and living in the home can keep the deferral going.⁷

The deferral and the ceiling stack. The SB 12 ceiling reduces what you owe on school taxes each year; the deferral delays when you have to pay whatever is left across every taxing unit.

A Separate Rule for 100% Disabled Veterans

The SB 12 ceiling isn’t the right route for veterans with a 100 percent disability rating from the U.S. Department of Veterans Affairs or a rating of individual unemployability. Those veterans get a complete exemption from property taxes on their homestead, meaning the entire appraised value is exempt across all taxing units, not just school districts. It isn’t a freeze or a ceiling.⁸

A surviving spouse married to the veteran at the time of death can keep the full exemption on the same home as long as they haven’t remarried and still live there. If that surviving spouse moves, the exemption transfers as a fixed dollar amount equal to what was exempted on the former home in the last year the spouse got the benefit there.⁸

1
Texas Education Agency. Update on Property Value Data and Frozen Levy Hold Harmless Methodology
2
State of Texas. Texas Tax Code 11.13 – Residence Homestead
3
State of Texas. Texas Tax Code 11.26 – Limitation of School Tax on Homesteads of Elderly or Disabled
4
Office of the Attorney General of Texas. Opinion No. KP-0470
5
Texas Comptroller of Public Accounts. Residence Homestead Exemption Application
6
Dallas Central Appraisal District. DCAD – Exemptions
7
State of Texas. Texas Tax Code 33.06
8
State of Texas. Texas Tax Code 11.131 – Residence Homestead of 100 Percent or Totally Disabled Veteran