While other states were having national impact elections on November 4, 2025, Texas was focused on benefitting its citizens. Long in the making, the November election saw a significant focus on property taxes. Not only the primary source of funding for most government programs, property taxes typically represent the largest bill Texas homeowners or businesses face. Given this, the numerous property tax cuts and adjustments in the election will have a large impact on the average person in Texas. Passing in a landslide, these tax reforms are going to have a wide-reaching effect in 2026 and beyond, with roughly $50 billion in tax cuts going through.
Over half of all propositions in the election were based around property taxes. Many of these changes have been enshrined in the Texas constitution, meaning they will require a constitutional amendment to undo. This means that whether you are a homeowner or own a business, you can expect these cuts and reforms to stick around. There is a great benefit to all taxpayers in these changes, though how this will affect the state and county governments in the future is not yet known. O’Connor will cover how you can benefit from these changes and just want to expect in the next few years.
Homestead Exemption Jumps from $100,000 to $140,000 Thanks to Proposition 13
The big ticket item of the 2025 election was the increase to the homestead exemption. These reforms are focused on school districts, which generally form the largest of the tax bills seen by Texans. These have already seen cuts in the recent past, with the homestead exemption for school districts being raised from $40,000 to $100,000 in 2023. If you were a homeowner in 2023, you experienced firsthand just how impactful this jump was. Proposition 13 enhanced these cuts by raising the exemption to $140,000. This will save the average homeowner several hundred dollars a year.
Homestead exemptions have been a cornerstone of tax relief in Texas and if you own a home, you can expect some huge savings in 2026. Unlike many former tax relief measures, you will not have to wait until another tax year to benefit from this cut. The new homestead reductions will be retroactively applied to the current tax bills, meaning you will experience a reduction right away. This instant tax relief is a rarity and will be a welcome gift for the holiday season. While the average savings will differ by county and school district, all taxpayers will benefit greatly.
Elderly and Disabled Homeowners Received Greater Savings
Texas has been working to take care of both senior and other vulnerable homeowners. If you are over 65, you typically see a homestead break of $10,000 when it comes to school districts. This amount can be added to your standard homestead exemption, giving you greater savings. The 2025 election saw Proposition 11 be passed. This amendment enhances the over 65 exemption greatly, moving the limit from $10,000 to $60,000. This means with the new amendments that your combined homestead exemptions will total $200,000. The same amount has also been extended to the disabled homestead exemption. Disabled and over 65 exemptions cannot both be applied, so you must choose one or the other. Thanks to the changes from Proposition 11, there is little functional difference between the two if you are over 65 and disabled, so choose whichever fits your circumstances. It is believed that many seniors and people with disabilities will pay no school district property tax thanks to Proposition 11.
New Exemptions Help in the Worst of Circumstances
A few new exemptions were added that provide relief for people who have experienced losses. If your home was destroyed in a fire, Proposition 10 gives you a temporary tax exemption to help you get back on your feet. Previously, it often took a property tax correction to remedy this situation. Proposition 7 also helps those dealing with a powerful loss. This grants a significant tax cut for the spouses of veterans that died while serving or passed away from service-related illnesses. Much like Proposition 10, this fills a previous gap in tax relief.
New Exemptions Help in the Worst of Circumstances
While Proposition 13 took all of the headlines, Proposition 9 may be the most important for the Texas economy as a whole. This tax break is aimed solely at businesses. Proposition 9 adds a tax exemption for business personal property up to $125,000. This means that if you own a business, you will get a tax cut on property that can generate income. This includes inventory, vehicles, machinery, and other equipment needed for a business to function. Previously, the exemption was only $2,500. Obviously, this is a major boon for businesses of all sizes, though small businesses are believed to be the biggest beneficiaries. This also provides relief for properties that are leased out to tenants but does not protect real estate that is sold.
Business personal property (BPP) is already one of the more complex issues facing businesses in Texas, so this provides welcome relief. It looks like one unsung benefit from the changes will be the removal of some red tape, allowing your business to have more flexibility. As some other laws helping small businesses were passed earlier in 2025, this year will hopefully be a transformative one for the lifeblood of the Texas economy. This got a further boost from Proposition 2, which banned any form of capital gains tax. While Texas currently has no such tax, this will prevent any future levies against investment. Capital gains had previously been protected under the ban on income taxes, but this could have been worked around via a loophole. This made 2025 a banner year for businesses.
Other Property Tax Relief
While standard homestead exemptions and BPP breaks make up the majority of saved taxes, there is still more relief for some more niche situations. Proposition 17 provides tax exemptions for border security measures if you live in a county along the Mexican border. If you allow state or federal security infrastructure to be built on your property, you will see the value of these improvements exempted from your tax bill. Proposition 5 allows for a BPP exemption for animal feed, with the goal of helping ranchers and farmers across the state.
Balancing the Books
While standard homestead exemptions and BPP breaks make up the majority of saved taxes, there is still more relief for some more niche situations. Proposition 17 provides tax exemptions for border security measures if you live in a county along the Mexican border. If you allow state or federal security infrastructure to be built on your property, you will see the value of these improvements exempted from your tax bill. Proposition 5 allows for a BPP exemption for animal feed, with the goal of helping ranchers and farmers across the state.
You can Combine Exemptions with Property Tax Appeals
Due to rising property values and taxes, Texans have been embracing property tax protests like never before. While these new exemption measures will certainly help, a well-executed protest can allow you to double-dip on savings. Appeals allow you to establish the true value of your property, while exemptions then lower this amount even further. These developments have given Texas property owners a chance to reduce their largest bill like never before, and the recent spate of exemptions can only enhance any protest that you choose to launch.
O’Connor is Here to Help with Exemptions and Protests
While these new exemptions are gamechangers, you need to use them to see any return. Filing some exemptions can be difficult, while others could be complicated by things such as estates or changes in ownership. We at O’Connor are here to help. We can answer any questions that you have about exemptions, new or old. We can help you file homestead, over 65, disabled, and every other kind of exemption. We also offer services that complement these new laws, such as help with BPP or cost segregation. With recent federal changes to cost segregation, business owners can combine it with BPP exemptions and protests for a triple threat of savings.
We at O’Connor will analyze your taxes for you every year and will protest your values annually to the highest stage needed. We will do this free of charge, with you only being handed a contingency fee on your winnings if your taxes are lowered. We can guide you through the new laws, the exemption changes, and take care of your whole appeal for you. We believe that 2026 will be a watershed moment for Texas taxpayers and are looking forward to helping you with all of your goals in the years to come.
