How Much Does a Texas Homestead Exemption Save?

A Texas homestead exemption offers a property tax reduction for eligible homeowners. This benefit lowers the taxable value of a primary residence, which in turn reduces the overall property tax bill. The exemption provides tax relief for individuals who own and reside in their homes.

Understanding Texas Homestead Exemptions

Texas provides several types of homestead exemptions. The most common is the General Residence Homestead Exemption, which applies to school district taxes. As of November 2023, this exemption increased to $100,000, meaning school taxes are calculated on the home’s appraised value minus this amount. For instance, a home appraised at $300,000 would have its taxable value reduced to $200,000 for school tax purposes.

Beyond the general exemption, additional benefits exist for particular groups. Homeowners aged 65 or older, as well as those with disabilities, can receive an additional $10,000 exemption for school district taxes. For individuals over 65, the school tax amount is also frozen, preventing future increases in those specific taxes.

Disabled veterans may qualify for varying exemption amounts based on their disability percentage, which apply to all local taxing units, not just school districts. For example, a disability rating between 10% and 29% provides a $5,000 deduction, while a 70% to 99% rating offers a $12,000 deduction. Local taxing units, such as cities, counties, and hospital districts, also have the option to offer their own homestead exemptions, which can vary widely.

Estimating Your Property Tax Savings

Calculating your potential property tax savings with a homestead exemption involves reducing your home’s appraised value to its taxable value. The core formula is straightforward: (Appraised Value – Exemption Amount) x Tax Rate = Property Tax Due. This calculation is applied separately for each taxing unit that levies a property tax, such as school districts, cities, and counties.

For instance, if your home is appraised at $250,000 and you qualify for the $100,000 general residence homestead exemption for school taxes, your taxable value for school taxes becomes $150,000. If the school district tax rate is 1.5%, your school tax bill would be $2,250 ($150,000 x 0.015). Without the exemption, the bill would be $3,750 ($250,000 x 0.015), representing a savings of $1,500.

The total savings depend on the home’s market value, the specific exemptions for which an owner qualifies, and the individual tax rates set by each local taxing unit. To find current tax rates for your specific location, visit your county appraisal district’s website. These websites provide tools or databases that list the tax rates for all entities that tax your property. The homestead cap, a feature of the general residence homestead exemption, limits the annual increase in a property’s appraised value to 10% for tax purposes, preventing sudden spikes. This cap begins applying in the second year an exemption is in place.

Applying for the Exemption

To apply for a Texas homestead exemption, submit an Application for Residential Homestead Exemption, commonly known as Form 50-114. This form is available on your local county appraisal district’s website or the Texas Comptroller’s website.

Along with the completed application, specific supporting documents are required. A copy of your Texas driver’s license or Texas-issued personal identification certificate is mandatory, and the address on your ID must match the property address. If your mailing address is a P.O. Box, your ID must still reflect the physical address of the homestead. For those who have inherited their home, a supplemental affidavit (Form 50-114-A) may be needed as proof of ownership if a deed is not in their name.

The completed application and supporting documents should be submitted to your local county appraisal district. Many districts offer options for submission, including mailing the documents or utilizing an online portal. The general deadline for filing is April 30th of the tax year for which you are applying, although a late application may be filed up to two years after the delinquency date, typically January 31st. Once your application is processed and approved, you will receive confirmation, and the exemption will be reflected on your subsequent property tax statements. There is no fee for applying for a homestead exemption.