Texas homestead exemption: what it’s worth and how to file

Texas has no state income tax, so local property taxes do much of the work of funding schools, counties and cities. That makes the homestead exemption one of the most valuable things a Texas homeowner can file for, and it’s free. Here’s what it’s worth after the 2025 increases, how to apply, and how it affects your mortgage payment.

What the homestead exemption is

A residence homestead exemption removes part of your home’s value from taxation, so you pay tax on a smaller amount. It applies only to your principal residence, not rentals or second homes.

How much it’s worth now

Texas voters approved Propositions 11 and 13 in November 2025, raising the school district exemptions:

Owners 65 or older or with a disability also get a school tax ceiling, which generally freezes the school portion of their bill at the level of the year they qualified, unless they make major improvements. Counties, cities and other local taxing units may offer their own optional exemptions on top. Your appraisal district’s website lists what applies to your address.

The 10% appraisal cap

Once your home has a homestead exemption, its taxable value can’t rise more than 10% a year, even if the market value jumps more. The cap starts on January 1 of the year after you acquire the home, so it doesn’t protect your first year. Your tax bill can still rise if local tax rates go up.

How to apply

1. Get Form 50-114, the Residence Homestead Exemption Application, from your county appraisal district’s website or the Texas Comptroller.
2. Have your Texas driver’s license or ID ready. The address generally needs to match the home.
3. File with your county appraisal district, not the Comptroller. Most districts accept it online.
4. Confirm it’s active on your appraisal district account a few weeks later.

• Deadline: generally April 30 of the tax year.
• Just bought? You can apply as soon as you own and live in the home. If you bought mid-year and the previous owner didn’t have the exemption, you may be able to get it for the rest of that year.
• Missed it? Texas generally allows late applications up to two years after the delinquency date, with a refund of taxes you overpaid.
• You usually file once. The exemption continues while you own and live in the home, though your district may ask you to confirm it periodically.

How it affects your mortgage payment

If your lender collects taxes in escrow, your monthly payment includes 1/12 of your estimated tax bill. Two things to watch:

• After you file, your escrow should drop at the next annual escrow review. Your lender may also refund any surplus.
• On a new build, the first year’s taxes may be based on the land value only. When the finished home is taxed the next year, the escrow can jump. Budget for it, and use your exemption to soften it.

To see the real taxes on a home you’re considering, paste the listing into our property cost lookup, then run the full payment in the payment calculator.