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Homestead Exemptions in Texas: How They Work and Who Qualifies

(Updated for 2022) If you’re a homeowner or home buyer in Texas, you’ve probably heard of homestead exemptions. Maybe that’s what brought you to our site. You’ve come to the right place! Below, you can learn all about Texas homestead exemptions, their basic requirements, and the application process.

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What Is a Texas Homestead Exemption?

At its core, a Texas homestead exemption is basically a tax break for qualifying homeowners. It’s one of the many perks of buying and owning a home in the Lone Star State. A homestead exemption allows you to “write down” your property value, so you don’t get taxed as much.

As you probably know, residential property taxes are a major revenue source for the state of Texas. They help fund public schools, libraries, streets and roads, and more. They also compensate for the lack of state income tax. Texas is one of several states that do not impose a statewide income tax. As a result, they tend to lean more heavily on homeowners to generate necessary revenues.

And that’s where the Texas homestead exemption comes into the picture. The “residence homestead exemption,” as it’s officially known, is one of several tax breaks associated with homeownership. The state offers additional exemptions for military veterans, disabled persons, homeowners over 65, etc. But those are the subject of another article.

Click here for general information on homestead exemptions. Find your county here.

How Does the Standard Exemption Work?

Let’s talks specifics. Here’s how the basic Texas homestead exemption works. Section 11.13(b) of the state’s tax code requires public school districts to offer a $40,000 exemption on “residence homesteads” located within their districts. That’s legal jargon for a home that serves as a primary residence.

Other sections of the tax code offer similar exemptions:

  • Section 11.13(n) gives taxing units the option to offer a separate homestead exemption of up to 20% of the appraised property value — but not less than $5,000.
  • Section 11.13(a) requires a homestead exemption of $3,000 to be offered in those counties that collect flood-control or “farm-to-market” taxes.

The most common type of homestead exemption in Texas is the $40,000 reduction mentioned above, as outlined in section 11.13(b) of the state tax code.

So how does that exemption work?

Let’s say the local tax assessor or appraiser in your area determines that your home is worth $200,000. Under the standard Texas homestead exemption, you would be allowed to reduce the taxable value of your property by $25,000. So you would only be paying taxes on a $175,000 property value, versus $200,000. That could potentially save you hundreds of dollars annually.

Depending on where you live, you might have a separate exemption of up to $40,000. So this is something you’ll want to research at the local level, starting with your county’s tax website. Look for the “appraisal district” section of the website. That’s where you’ll find the homestead exemption rules and guidelines for your county, as well as any special requirements.

Prior to January 1, 2022, homestead exemptions could not be filed until the year after a home was purchased. As of 2022, homeowners may file for a homestead exemption immediately upon closing on their property, so long as an exemption has not yet been filed for that tax year.

Who Qualifies for It?

The good news is that there aren’t any strict qualification criteria for the general ($40,000) homestead exemption. You must have an ownership interest in the property and use it as your “principal residence.” In other words, you can’t use a homestead exemption on a second / vacation home. But that’s about it, as far as requirements go.

As it states 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.”

Note: The general rules and procedures for a Texas homestead exemption come from state taxation officials. But the individual counties can implement them in different ways. So the exact requirements and exemption amounts can vary slightly from one county to the next.

Click here for general information on homestead exemptions. Find your county here.

How Do I Apply for It?

Applying for homestead exemptions in Texas is fairly straightforward, assuming you meet the basic eligibility requirements mentioned above. All you have to do is file a bit of paperwork.

The process can vary slightly from one county to the next. But in general, it works like this:

  1. Visit the tax appraisal website for your county to find any specific instructions.
  2. Obtain a copy of the “Application of Residential Homestead Exemption” (a.k.a., Property Tax Form 50-114) from your local appraisal district.
  3. Complete the application with the required information about yourself and the property you’re claiming as a primary residence.
  4. Submit the form in accordance with instructions provided by your appraisal district.
  5. Provide any additional items your district might require (e.g., copy of driver’s license).
  6. Follow up with your local appraisal district if you don’t receive any confirmation.

To learn more: If you have additional questions about this subject, you can refer to the “property tax exemptions” section of the Texas comptroller’s office. Their site offers more information on the topics covered above, along with a helpful FAQ section. You can find it with a quick Google search. You’ll also want to visit the “appraisal district” website for your particular county.

Have mortgage questions? Trinity Oaks Mortgage proudly serves the entire DFW Metroplex. Our experienced loan officers can answer any mortgage-related questions you have and guide you through the process. We look forward to hearing from you!

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