Texas Homestead Exemption: What New Homeowners Need to File
Texas homeowners with an active homestead exemption removed $140,000 from their appraised value for school district taxes in 2026. On a $420,000 home at an effective tax rate of 2%, that exemption saves roughly $2,800 per year, or about $233 per month. Despite that impact, a meaningful share of new Texas homeowners fail to file the exemption in their first year of ownership, leaving thousands of dollars on the table before they ever realize it.
The exemption is not automatic. It requires a one-time application filed with your county’s Central Appraisal District (CAD). Filing is free, takes about 15 minutes, and once granted, renews automatically each year as long as the property remains your primary residence. Here is how it works, what you need to file, and what to do if you missed the deadline.
What the Texas Homestead Exemption Actually Does
The homestead exemption is a property tax break available to any Texas homeowner who uses the property as their primary residence. It works by reducing the taxable appraised value of your home before your tax rate is applied. For 2026, the exemption removes $140,000 from your appraised value for the school district portion of your tax bill.
Additional exemption layers exist for specific groups:
- Over-65 exemption: homeowners 65 or older qualify for an additional exemption of at least $10,000 from the school district, plus a freeze on the school district tax amount (it cannot increase while you remain in the home)
- Disability exemption: homeowners who meet the Social Security Administration’s definition of disability qualify for the same additional exemption as the over-65 exemption
- 100% disabled veteran exemption: veterans with a 100% disability rating from the VA are exempt from all property taxes on their Texas homestead
- County and city exemptions: some counties and cities offer additional optional exemptions (typically 3% to 20% of the county-assessed value). Check your county’s appraisal district for specific amounts.
The 10% annual cap on appraised value increases, discussed frequently in the context of Travis County appraisals, only applies to properties with an active homestead exemption. Without the exemption, your appraised value can increase without that limitation, making the filing even more critical in appreciating markets.
Who Qualifies for the Texas Homestead Exemption
To qualify, you must:
- Own the property (your name must be on the deed)
- Occupy the property as your primary residence on January 1 of the tax year for which you are filing (with an important exception for new buyers, discussed below)
- Be a Texas resident
- Not claim a homestead exemption on any other property in Texas or any other state
The property must be your primary residence, meaning the address associated with your Texas driver’s license or ID. You cannot claim the exemption on a vacation home, a rental property you own, or a home you own but do not live in.
For new buyers: Texas law changed in 2022 to allow a partial-year homestead exemption for homes purchased after January 1. If you purchased and occupied your home after January 1, 2026, you can still file for an exemption that applies to a pro-rated portion of the 2026 tax year. You do not have to wait until the following January 1 anymore. This change matters, because buyers who closed in the spring or summer can file immediately rather than waiting until the next calendar year.
How to File in Your Texas County
Filing varies slightly by county, but the process is similar across Texas:
- Get the application form. Download Form 50-114 (Residence Homestead Exemption Application) from the Texas Comptroller’s website or from your county CAD’s website. Travis County: tcad.org. Williamson County: wcad.org. Harris County: hcad.org. Dallas County: dallascad.org. Bexar County (San Antonio): bcad.org.
- Fill out the form. You will need your property account number (found on your appraisal notice or county tax statement), your driver’s license or state ID number showing the property address, and your signature affirming the property is your primary residence.
- Attach your ID. You must include a copy of a Texas driver’s license or state ID card showing the property’s address as your residence address.
- Submit to your county CAD by mail, in person, or online (many counties now accept online submissions). The application must be received, not just postmarked, by the filing deadline.
For Travis County specifically, you can file entirely online at tcad.org/homesteadexemptions. The process takes about 15 minutes and gives you an instant confirmation. If you have questions, TCAD’s Exemption Helpline is available at (512) 873-1560 during business hours.
The Filing Deadline
The standard deadline to file for a homestead exemption that applies to the current tax year is April 30. For 2026, that deadline passed on April 30, 2026. However, you can still file after the deadline and your exemption will take effect beginning January 1 of the following year (2027 in this case).
The exception is new buyers. If you purchased your home after January 1, 2026, you can file your homestead exemption at any point during the year and receive a partial exemption benefit for 2026 on the pro-rated remaining months. Texas allows this under the 2022 law change specifically to prevent new buyers from being penalized for purchasing mid-year.
Bottom line: if you have not yet filed your homestead exemption, file now. The sooner you file, the sooner you lock in the 10% annual appraisal cap, which can save significant money in subsequent tax years even if the current-year benefit is partial or delayed.
What Happens After You File
TCAD and most Texas CADs aim to process applications within 90 days of receipt. You will receive a written notice of approval or denial. Once approved, the exemption appears on your property record and renews automatically each year.
If your driver’s license still shows your old address, update it first. Your ID must reflect the property address where you are claiming the exemption. Filing with a mismatched address is the single most common reason applications are delayed or denied.
If your application is denied, you have the right to appeal the denial to the Appraisal Review Board (ARB). Request the appeal in writing within the timeframe specified in your denial notice.
How the Homestead Exemption Affects Your Mortgage Payment
If you have an escrow account, your mortgage servicer collects property taxes as part of your monthly payment. When your homestead exemption takes effect and lowers your tax bill, your servicer recalculates your escrow requirement at the next annual escrow analysis and adjusts your monthly payment accordingly. The adjustment usually happens within one to two months of the tax bill being issued in the fall.
Frequently Asked Questions
Does my lender automatically file the homestead exemption for me?
No. The homestead exemption application is filed separately with your county appraisal district and has no connection to your lender or closing process. Your title company or real estate agent may remind you to file, but the responsibility is yours. You can file online at your county CAD’s website within days of closing if the property address is on your Texas driver’s license.
What if my driver’s license still shows my old address?
You need to update your Texas driver’s license or state ID to show the new property address before or at the time of filing. The county CAD requires that your ID match the property address. Update your license at a Texas DPS office or online at txdps.state.tx.us. The entire update takes a few weeks for your new card to arrive, so handle this soon after closing.
Can I have a homestead exemption on two properties in Texas?
No. Texas law allows only one homestead exemption per household per tax year. The exemption must apply to your primary residence. If you own multiple properties, you must choose one to designate as your homestead. Claiming an exemption on a property that is not your primary residence is a violation of Texas law and can result in penalties and back taxes.
Does the homestead exemption reduce my federal taxes?
The Texas homestead exemption reduces your state and local property tax bill, not your federal income taxes directly. However, if you itemize deductions on your federal return, a lower property tax bill means a smaller SALT (state and local tax) deduction. The practical impact depends on whether you itemize and whether your total SALT deductions exceed the $10,000 cap under current federal law.
What happens to my homestead exemption if I rent out part of my home?
You can still claim a homestead exemption if you rent part of your home (such as a room or a garage apartment) as long as you continue to occupy the rest of the property as your primary residence. If you move out entirely and rent the whole property, the exemption no longer applies and you must notify your county CAD to avoid penalties for an improper claim.
I bought my home in 2024 and never filed. Can I still get the exemption?
Yes. Filing for a homestead exemption is not retroactive to prior years, but you can file now and receive the benefit starting with the current or upcoming tax year. For a home purchased in 2024, filing in 2026 means the exemption takes effect for the 2026 tax year (which generates your fall 2026 tax bill). You will not receive a refund for 2024 or 2025, but you will lock in the 10% annual appraisal cap going forward, which compounds in value over time.
If you are buying a home in Texas and want a checklist of the steps to take after closing, including the homestead exemption filing, reach out and let’s talk through your options.
Anthony Ferrando | Mortgage Loan Originator | NMLS# 1919613 | Ferrando Financial LLC NMLS# 2403080 | Licensed in Texas. This is not a commitment to lend. Loan approval is subject to credit, income, and property qualifications. Property tax exemptions are administered by county appraisal districts and are subject to state law. Consult a licensed CPA or tax advisor for guidance on your specific tax situation. Sources: Texas Comptroller of Public Accounts, Travis Central Appraisal District (tcad.org), Texas Property Tax Code Section 11.13. Equal Housing Lender.
