What You Need To Know About Texas Homestead Exemptions

If you're a current homeowner in Texas or plan to buy a home here, you could be eligible for a property tax break through the state's homestead exemptions. Read on to learn about homestead exemptions, who qualifies, and how to apply for your exemption.

What is a Homestead Exemption?

A homestead exemption, or residence homestead exemption, as it's officially called, is a beneficial tax break for homeowners. It allows you to write down your property value, so you are taxed at a lower rate. The amount each homeowner can save with a homestead exemption in Texas varies based on your home's value and location.

Section 11.13 (b) of the Texas tax code requires public school districts to offer a $40,000 exemption on residence homesteads (primary residences) located within their districts for the 2022 tax year.

For example, if your area's tax assessor or appraiser determines your home's value at $200,000. Under the standard Texas homestead exemption, you could reduce your taxable property value by $40,000. Therefore, you would only pay taxes on a $160,000 property value, not $200,000.

Depending on where you live, if you are age 65 or over, disabled, or own agricultural land, you may be entitled to additional homestead exemptions.

You can visit the Texas Comptroller's website for general information on the state's homestead exemptions. Then click on your county here and look for the appraisal district section to find the homestead exemption guidelines and requirements specific to your county.

It's important to note that before January 1, 2022, homestead exemptions could only be filed the year after the home was purchased. As of 2022, homeowners may file for a homestead exemption immediately after closing on their property, as long as an exemption was not filed yet for that tax year.

Who Qualifies for a Homestead Exemption?

To qualify for the standard Texas homestead exemption, you must own and occupy your home, be a US citizen aged 18 or older, and have lived in Texas for the past year. You cannot use a homestead exemption on a second property owned, such as a vacation home. It is for your primary residence only.

As stated on the Texas Comptroller's website:

A homestead can be a separate structure, condominium, or a manufactured home located on owned or leased land, as long as the individual living in the home owns it. A homestead can include up to 20 acres, if the land is owned by the homeowner and used for a purpose related to the residential use of the homestead.

How to Apply for a Homestead Exemption

The application process for homestead exemptions in Texas varies by county. You can visit the tax appraisal website for your county to find its homestead exemption application and instructions on how to submit it. Once your homestead exemption is issued, you do have to apply again for the following tax years, as long as you continue owning and living in the same residence.

The 3 Most Common Homestead Exemptions

If you fall under any of these categories below, you may be entitled to additional homestead exemptions in Texas.

1. Homeowners Aged 65+
Individuals aged 65 or older qualify for a $10,000 residence homestead exemption for school district taxes, in addition to the standard $40,000 exemption for all homeowners. If the owner qualifies for both the $10,000 exemption for seniors and the $10,000 exemption for disabled homeowners, they must choose one as they cannot receive both exemptions. Other taxing entities may also offer exemptions of at least $3,000 for those aged 65 or older. If the homeowner passes away, the surviving spouse may still be eligible for the local exemption if they're 55 or older and own and live in the home.

2. Disabled Homeowners
In Texas, school districts also provide a $10,000 disability exemption. Disabled homeowners can receive this exemption in addition to the standard $40,000 homestead exemption. But they cannot receive both the disability exemption and the seniors' exemption, so they would need to pick one if they qualify for both. Other taxing entities may offer disability exemptions of at least $3,000.

3. Agricultural Landowners
An ag exemption is for agricultural landowners but is not really an exemption; it is a special valuation. It allows them to have their property taxes calculated based on productive agricultural value, instead of the land's market value, which can lower their tax burden. Eligibility requirements and tax rates differ by county.