Texas Property Tax Exemptions: A Comprehensive Guide for Homeowners

This article was fact-checked by our editors and Christina Taylor, MBA, senior manager of tax operations for Credit Karma Tax®.

In the past decade, home prices in the Lone Star State have risen faster than prices in other states, and faster than most Texans’ personal income, according to the state’s comptroller.

As home prices rise, the amount that homeowners pay in property taxes typically rises as well — and Texas is no different, despite the fact that it doesn’t levy a state property tax. Instead, counties, cities, school districts and special purpose districts can all levy property taxes in Texas. And all those taxes can really add up, depending on tax rates where you live and the appraised value of your home.

The average property tax rate (combining county, city and school district taxes) in Texas was $2.31 per every $100 of assessed value in 2018, according to data from the Texas Comptroller of Public Accounts. At that rate, a home with an assessed value of $249,000 would cost its owners about $5,752 in property taxes annually.

But Texas has multiple property tax exemptions in place to help homeowners offset the financial impact of property taxes. If you qualify for one, an exemption can reduce or eliminate your property tax obligation by removing part or all of your home’s appraised value from taxation. Here’s what you need to know.

---

• What Texas property tax exemptions are available?
• Who qualifies for a Texas property tax exemption?
• How much are Texas property tax exemptions worth?
• How can I apply for a Texas property tax exemption?

---

What Texas property tax exemptions are available?

Texas offers several property tax exemptions. Some — the general residence homestead exemption, for example — are widely available to most homeowners. Others are only available to specific groups, such as disabled veterans or homeowners who’ve installed wind- or solar-powered energy equipment in their homes.

Here are the basic types of available exemptions.

• Residence homestead exemptions — Texas requires school districts to offer a general residence homestead exemption. And in addition to that, state law allows taxing units to offer an optional additional exemption. Counties that levy farm-to-market or flood-control taxes must provide an additional exemption, too.
• Inherited residence homestead exemption — Texans who inherit a property and meet certain requirements may be able to qualify for this exemption.
• Seniors and disabled persons exemption — In addition to the residence homestead exemption that most homeowners qualify for, people 65 or older and those who have disabilities can qualify for an additional exemption (required by law) on their school district taxes. Additionally, the law allows tax units to provide an additional local exemption for seniors and disabled people. Surviving spouses may also qualify for the exemptions, if they meet requirements.
• Veterans exemptions — Partial exemptions are available for qualifying disabled veterans, their surviving spouses and their children. Veterans who are 100% disabled (and their spouses, if the veteran dies) may also qualify to have their entire property tax bill exempted.
• Solar- and wind-powered energy devices — If you’ve installed certain types of solar- and wind-powered devices to produce energy used in your home, you may be able to qualify for this additional exemption.

Common Question

What does “assessed value” mean?

Your home’s “assessed value” is the amount that a public tax assessor has determined it’s worth. Taxing bodies use a home’s assessed value in calculating how much property tax is due on it.

Who qualifies for a property tax exemption?

Pretty much every Texan who owns a home and lives in it as their primary residence should be able to qualify for the general homestead exemption that applies to their school district taxes. Whether you can get a separate residence homestead exemption will depend on whether you meet qualifications, and those vary depending on the exemption.

For example, to get a 65 or older exemption, you must meet age requirements. Likewise, to get an exemption as a person with disabilities, you must meet a definition of disability that would allow you to receive disability benefits. To get an additional exemption for flood control taxes, you must live in a county that levies that tax.

And remember that in most cases, you’ll have to apply for your exemption, submit your application by a specified deadline, and meet qualifications.

How much are Texas property tax exemptions worth?

Property tax exemption amounts in Texas vary, depending on the type of exemption and a property owner’s circumstances. Here’s a rundown of what exemptions are generally worth.

Exemptions Amounts Downloadable Application Form (PDF)

Residence homestead exemptions

• $25,000 school district exemption (required by law)
• 20% (at least $5,000) of assessed value additional exemption (optional at discretion of local taxing district)
• $3,000 additional exemption in counties with farm-to-market or flood control taxes (required by law)

Form 50-114, Application for Residence Homestead Exemption

Senior or disabled exemptions

• $10,000 additional school district exemption
• $3,000 additional exemption, optional for any taxing unit

Form 50-114 Application for Residence Homestead Exemption

Veterans exemptions

• Amount of exemption depends on degree of disability
• 100% for completely disabled veterans

Form 50-135, Application for Disabled Veteran’s or Survivor’s Exemption

Solar- and wind-powered energy device

• Amount depends on appraised value of property and improvements

Form 50-123, Exemption Application for Solar or Wind-Powered Energy Devices

Because Texas offers multiple types of property tax exemptions, it’s possible you could qualify for more than one. Here’s an example.

• If you own your principal residence in Texas, and your school district imposes taxes, you’ll likely qualify for the basic homestead exemption, which allows you to exempt $25,000 of your home’s assessed value from being subject to school taxes.
• If you live in an area that also has a local optional exemption, that’s at least another $5,000 off your assessed value.
• And if you’re also 65 or older, or have certain disabilities, you could get the additional $10,000 exemption required by law.

In this one example, your total property tax exemptions could add up to at least $40,000 of your home’s assessed value, which would be excluded from your property taxes.

How can I apply for a Texas property tax exemption?

You’ll likely need to apply for your exemption only once. Residence homestead, solar-/wind-powered and disabled veterans exemptions all require one-time applications, unless an appraiser for a taxing district asks you to submit a new application.

Many of the residence exemptions use the same form (see above table), though there are different forms for veterans’ exemptions and energy-device exemptions. All are available through the Texas comptroller’s website (or you can click on the links in the table above).

Common Question

Can I deduct property taxes from my federal income taxes?

State and local property taxes can be deducted as part of the state and local taxes deduction, which also can include state and local income taxes. But the total deduction is capped at $10,000 ($5,000 for people married filing separately).

---

Bottom line

Property taxes can be a significant cost of homeownership. But many states, including Texas, allow exemptions that can help reduce homeowners’ property tax burden. You’ll need to meet eligibility and application requirements in order to qualify for a Texas property tax exemption.

Fortunately, the state has multiple exemptions and it’s possible to qualify for more than one. Those exemptions can help reduce the amount of assessed value that you get taxed on, and ultimately result in a lower property tax bill.

Relevant sources: Texas Comptroller: Property Tax Exemptions | Texas Comptroller: Texas Housing Prices on the Rise | Texas Comptroller: Residence Homestead Exemption Frequently Asked Questions | Tax Cuts and Jobs Act of 2017

---

Christina Taylor is senior manager of tax operations for Credit Karma Tax®. She has more than a dozen years of experience in tax, accounting and business operations. Christina founded her own accounting consultancy and managed it for more than six years. She co-developed an online DIY tax-preparation product, serving as chief operating officer for seven years. She is the current treasurer of the National Association of Computerized Tax Processors and holds a bachelor’s in business administration/accounting from Baker College and an MBA from Meredith College. You can find her on LinkedIn.