Buyer guide · Texas

Your first Texas property tax bill: homestead exemption, the 10% cap and protests

How the $140,000 school homestead exemption, the 10% appraisal cap and the May protest deadline shape a Texas first-time buyer's tax bill and escrow.

Bottom line:

Texas leans hard on local property taxes, so the homestead exemption is the first form a new owner should file. School districts must exempt $140,000 of a homestead's value. File Form 50-114 with your county appraisal district; a buyer who closes after January 1 can get the exemption for the rest of that year if the seller didn't already have it. The 10% yearly cap on taxable value starts the year after you qualify.

Why property tax is the line item that decides your payment

Ask a Texas loan officer what surprises first-time buyers most and the answer is rarely the interest rate. It is the tax escrow. Texas pays for schools, cities, counties and special districts largely through property tax, and every one of those bills lands inside your monthly mortgage payment.

That makes the homestead exemption more than paperwork. It is a direct cut to the value your school district can tax, and it is the gateway to a cap on how fast your taxable value can climb. Miss it and you can pay for a full year as if you were an investor.

What the homestead exemption takes off your value

The Texas Comptroller lists these residence homestead exemptions under the Tax Code:

Exemption	Amount	Who sets it
School district general homestead	$140,000 of appraised value	Required by state law
School district, age 65 or older or disabled	An additional $60,000	Required by state law
Local option percentage	Up to 20% of appraised value, at least $5,000	Each city, county or other taxing unit decides
Local option, 65 or older or disabled	At least $3,000	Each taxing unit decides

The $140,000 figure came from Senate Bill 4 in the 2025 legislative session, which raised the school exemption from $100,000 starting with the 2025 tax year, contingent on voters approving the matching constitutional amendment. The Comptroller now lists $140,000 as the required amount.

Notice what the table does not say. The school exemption only reduces the school portion of the bill. Your city, county, community college district or utility district each decide on their own whether to offer a percentage exemption. Two houses at the same price on opposite sides of a county line can carry very different bills.

A quick example (illustrative figures)

Say you buy a home the appraisal district values at $320,000. With the homestead exemption in place, your school district taxes $180,000 of it ($320,000 minus $140,000). Without it, the school district taxes the full $320,000. Multiply that $140,000 gap by your school district's rate and you can see why lenders and title companies keep reminding buyers to file. Your district's actual rate is on its truth-in-taxation notice and on your appraisal district's website.

How and when to file as a new owner

You file with the appraisal district in the county where the home sits, not with the Comptroller and not with your lender. The form is the Comptroller's Form 50-114, the Residence Homestead Exemption Application. Most appraisal districts take it online or by mail.

What to attach: a copy of your Texas driver's license or state ID. The address on it has to match the home you are claiming. Some military members and their spouses are exempt from that rule, and the form explains how to ask for a waiver.
The usual deadline: the form says the application is generally due by April 30 of the year you want the exemption.
Late filing: the form allows a late application up to two years after the deadline, so a missed year can often be fixed.
The mid-year rule: if you buy after January 1, the form says you can get the exemption for the part of that year you own the home, as long as the previous owner did not already get the same exemption for that year. You must live in the home as your main residence and claim no other homestead.

In plain terms: move in, update your driver's license address, then file. Don't wait for a tax bill to remind you.

The 10% cap, and why year one doesn't get it

Texas Tax Code Section 23.23 limits how fast a homestead's appraised value can rise. Per the Comptroller, the taxable value of a qualified homestead cannot go up more than 10% a year. Market value can jump more than that; the cap only limits the value your bill is based on.

The catch for buyers: the cap takes effect on January 1 of the tax year after you first qualify. Your first year is taxed on whatever value the appraisal district sets for January 1. The cap protects you from year two onward, and it drops off the year after you stop qualifying, such as when you move out and rent the place.

Your appraisal notice and the May protest window

Every spring, appraisal districts mail value notices based on the home's condition on January 1. The Harris County Appraisal District, for one, lists the protest deadline as May 15, or 30 days after the notice date if that is later.

If the value looks high for what you paid, a protest is a free shot. Bring your closing disclosure, the appraisal your lender ordered, photos of anything that needs repair and recent sales of similar homes nearby. Many districts let you file online.

When does the bill come?

Per HCAD, tax bills go out in October or November, and unpaid taxes become delinquent on February 1. If you have an escrow account, your servicer pays the bill for you. That brings us to the part that catches first-year owners.

The escrow shortage trap

When you close, the lender sets up escrow using the best tax estimate it has, often the prior owner's bill. Texas taxes are billed for the whole year in the fall, so the title company also splits the current year between you and the seller at closing.

Problems show up when the prior owner's bill was lower than yours will be. Maybe the seller was over 65 and had a tax ceiling, or the home was just built and the lot was valued as land. Your first full bill comes in higher, the escrow account comes up short, and the servicer raises your payment to catch up.

How to protect yourself:

Ask your lender to estimate taxes on your purchase price at current rates, not the seller's old bill.
Find out if the seller had an over-65, disabled or veteran exemption. Those don't transfer to you.
Keep a cushion in savings for a possible escrow increase after year one.
File the homestead form as soon as you move in.

Exemptions that matter to Texas heroes

Two exemptions on the Comptroller's list touch the households this site serves:

Disabled veterans: a veteran rated 100% service-connected disabled, or rated individually unemployable, can get a total exemption on the homestead under Tax Code Section 11.131. Partial exemptions under Section 11.22 vary with the disability rating.
Surviving spouses of first responders: under Section 11.134, the surviving spouse of a first responder killed in the line of duty can receive a total exemption on the homestead, as long as they have not remarried.

Over-65 and disabled owners also get a school tax ceiling under Section 11.26, which generally holds school taxes at the amount from the year they first qualified.

How property tax ties back to down payment help

Homes for Texas Heroes and the TDHCA programs both run through a lender who looks at your total monthly payment, and taxes are a big piece of it. A home in a high-rate area can push your debt-to-income ratio past what the lender allows even when the price fits. Before you fall for a house, get a tax estimate and run the payment.

When you are ready to see what assistance you could pair with that payment, check your eligibility.

Readers also ask

How much is the Texas homestead exemption in 2026?

School districts must exempt $140,000 of a homestead's appraised value, per the Texas Comptroller. Owners who are 65 or older or disabled get an additional $60,000 for school taxes. Cities, counties and other taxing units can add a percentage exemption of up to 20%.

Can I get the homestead exemption the same year I buy?

Often, yes. Form 50-114 says an owner who buys after January 1 can receive the exemption for the part of the year they own the home, as long as the previous owner did not receive the same exemption that year.

When does the 10% cap start?

On January 1 of the tax year after you first qualify for the homestead exemption. Your first year is taxed on the appraisal district's January 1 value without the cap.

Where do I file the homestead form?

With the appraisal district in the county where the home is located, using Form 50-114. Attach a copy of your Texas driver's license or ID showing the home's address.

Why did my mortgage payment go up after the first year?

Usually because the escrow estimate at closing was based on the prior owner's lower tax bill. When your full bill arrives, the servicer raises the payment to cover the shortage. Ask for a tax estimate on your purchase price before you close.

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