Texas Homestead Exemption Guide

By PropertyClub Team
Aug 17th 2023
The Texas homestead exemption can take a significant chunk out of your property taxes. The exemption taxes your home as if it was worth less money in an effort to lower your property tax obligation. For example, if your home is worth $450k and you qualify for the Homestead Exemption, you could pay property taxes on a value as low as $410k.

hash-markWhat Is a Homestead Exemption in Texas?

The Texas residential homestead exemption allows homeowners to reduce their school tax obligation by $40,000. Many counties and cities offer a 20% deduction of the total value of the home, especially in North Texas.

hash-markWho Qualifies for the Homestead Exemption in Texas?

Homeowners qualify for that homestead exemption, but only a homeowner’s principal residence qualifies. If you own rental properties or vacation homes, the Homestead Exemption doesn’t apply to those. 

You can prove that you’re a homeowner by living in your primary residence. In some cases, as long as you’ve made a prudent effort to occupy a property (such as a piece of vacant land where you’ve started framing a house, installed a septic tank, etc.), that property can qualify for the Homestead Exemption even if you’re currently living somewhere else while the construction is underway.

hash-markHow Much Does the Homestead Exemption Save You in Texas?

This depends on your specific county and local laws. There is no state property tax in Texas, so all property taxes are local. In 1982, Texas outlawed state property taxes after more than a decade of mismanagement and consistent undervaluation from property assessors. It wasn’t a reliable form of taxation, and it received a lot of criticism and blowback from Texas citizens.

hash-markTexas Homestead Exemption Bottom Line

The Texas Homestead Exemption allows you to decrease the taxable value of your primary residence in accordance with local laws and regulations. Sometimes this amount is 10% of the total value of the home, and other times it’s a lump sum amount, like $20,000 or $40,000. Check the laws and regulations for the county in which you reside to learn more.

hash-markTexas Homestead Exemption FAQs

Can You File the Homestead Exemption Online?

Yes, you can file the Homestead Exemption online by visiting the website of your local Central Appraisal District. 

Central Appraisal Districts were formed for each county in an attempt to depoliticize the appraisal process when Texas lawmakers found that there were no uniform practices or reassessment timelines for appraisals. Today, every property is assessed at full market value, and a reassessment is performed once every three years.

How Fast Is a Homestead Exemption Approved? 

It depends on the county, but it generally takes anywhere from 2-3 months for the homestead exemption application to be approved.

Travis Central Appraisal District, for instance, says it can take up to 90 days to process a homestead exemption application.

Additionally, Williamson Central Appraisal District says that the process takes between 6-8 weeks.

Finally, Montgomery Central Appraisal District reports that action on your application will occur within 90 days.

How to Check the Status of Your Texas Homestead Exemption Application?

Most CADs will have an online portal where you can check the status of your application. 

If you’re confused about how to find the appraisal district for where you’re located, simply search the name of your county along with “central appraisal district.” Every county in Texas has a Central Appraisal District, and most of them will have links to allow you to file the Homestead Exemption.

Do You Have to Renew the Exemption Annually?

You only have to file for the application once. It is not something that needs to be renewed. The exemption will be automatically applied to your residence for each tax year. However, some counties require that you own and occupy your home by at least January 1st of the tax year. Either way, you should aim to file the application no later than April 30th since that’s when the Notice of Appraised Value is typically renewed.