If you buy a home in Texas and live in it as your principal residence, one of the first tasks after closing is applying for the residence homestead exemption. The exemption lowers the taxable value of your home for certain taxing units, which reduces your property tax bill. It is not automatic for new owners, so it is easy to miss in the rush of moving.
What the homestead exemption does
A homestead exemption removes part of your home's value from taxation. School districts are required by state law to offer a general homestead exemption, and counties, cities and other taxing units may offer their own optional exemptions. The amounts are set by law and local decisions and can change, so check the current figures with your appraisal district or the Texas Comptroller of Public Accounts.
Having a homestead exemption also brings another protection: Texas law limits how much the taxable value of a homestead can increase from one year to the next, even if the market value rises faster. The limit starts once the home has qualified as your homestead.
Who qualifies
- You must own the home. This includes most ownership situations, such as owning with a spouse or through certain trusts.
- You must live in the home as your principal residence.
- You can claim a homestead exemption on only one home at a time.
Additional exemptions are available to homeowners who are 65 or older, homeowners with disabilities, and certain disabled veterans and surviving spouses. Some of these also freeze school taxes at a ceiling. If any of these may apply to you, ask the appraisal district which forms and proof you need.
How to apply
- Find your appraisal district. Each Texas county has an appraisal district. Its website explains local exemptions and often lets you apply online.
- Complete the application. The standard form is the Residence Homestead Exemption Application (Form 50-114), available from your appraisal district and the Comptroller's website.
- Provide identification. Applicants are generally asked for a copy of a Texas driver's license or state ID showing the homestead address. Update your license address after you move so it matches.
- Submit and keep proof. Keep a copy of your application and any confirmation you receive.
When to apply
State law sets the filing deadlines and also allows late applications in some circumstances. Rules about whether you can apply in the same year you buy have changed in recent years, so ask your appraisal district which tax year your application will cover. Applying soon after you move in is the simplest way to avoid missing a deadline. In most cases you do not need to reapply each year unless the appraisal district asks you to or your situation changes.
Check your notices and bills
Each spring, appraisal districts send notices of appraised value. Confirm that your exemption is listed. When the tax bill arrives, check that the exemption amounts were applied. If your mortgage has an escrow account, the lender pays the bill, but the exemption still affects how much you owe and can change your monthly payment after the next escrow analysis.
If you disagree with your value
The exemption and the appraised value are separate issues. If you think your home's value is too high, you can file a protest with the appraisal review board by the deadline on your notice. The Comptroller publishes a taxpayer guide that explains the protest process.
Key takeaways
- New Texas homeowners must apply for the homestead exemption; it does not transfer from the seller.
- Apply through your county appraisal district with Form 50-114 and an ID that shows the home's address.
- Additional exemptions exist for owners who are 65 or older, disabled, or disabled veterans.
- Check your appraisal notice and tax bill each year to make sure the exemption is applied.
This article is general information, not legal, tax or lending advice. Loan requirements differ between lenders and change over time, so confirm the details with your lender, the relevant agency or a licensed professional.