Property taxes are usually the largest single expense for landowners in Texas. As the primary source of funding for government, including schools, Texas has to have high property taxes to keep things functioning. This has led to debates and legislation to help lower these taxes, though they still remain high. This has led to more Texans than ever using property tax appeals to lower their taxable value and eventually, their tax bill.
However, the traditional method is often the best. Exemptions are usually the first line of defense when it comes to lowering taxes, and Texas has plenty for taxpayers of all stripes. In this article, we will go over the types of exemptions you can apply for, how they have changed, and when you need to file them.
Exemption Changes to Start 2026
Thanks to voters across Texas, many new changes to exemptions were passed at the end of 2025. These became effective on January 1, 2026, and will provide enhanced relief for homeowners across the state. The homestead, over-65, and disabled exemptions all saw record increases to help battle rising taxable values. These changes mostly go toward school taxes and have the potential to save you thousands. In some cases, school taxes can even be eliminated entirely, if you have the proper exemptions. There could be even more reforms coming in 2026, so be sure to stay on top of any exemptions you qualify for.
Texas Homestead Exemption
The one exemption available to every homeowner in Texas, the homestead exemption has been a stalwart part of every taxpayer’s defense against property taxes for decades. This simple exemption allows a homeowner to knock off a large chunk of their taxable value when it comes to paying school taxes, the largest property tax type. You qualify for this exemption if the home is your primary residence. You cannot claim it on rental properties, second homes, or other situations, however, only on your own permanent home.
This exemption was given an extreme overhaul at the end of 2025, which was retroactively applied to tax bills. Originally, the homestead exemption had seen an increase from $40,000 to $100,000 in 2023. 2025 saw this bumped to $140,000 for school taxes, bringing the largest savings yet seen. This saved homeowners across the state billions of dollars, and is seen as one of the most effective tax cuts in the country. While most Texans have homestead exemptions, this overhaul should encourage the remainder to file right away.
Homestead 10% Cap
Besides the obvious savings, the homestead exemption has another benefit. If your residence is declared a homestead, you get more legal and tax protections. The biggest benefit is a 10% cap on assessment increases. This means that your home cannot have its taxable value increased beyond 10% in any year. With the Texas housing market heating up, this can be incredibly valuable. This is especially useful in counties like Denton, Fort Bend, and Travis, where home prices are reaching new highs at rapid rates. This could even keep your assessed value below market value, a true rarity in Texas. The 10% rule protects you against market changes, not against improvements to your home, which can make your assessment increase.
Over-65 Exemption
This exemption goes hand-in-hand with the homestead, and both can be applied at the same time. As it says on the tin, the over-65 exemption offers savings for homeowners who are 65 or over. Like the standard homestead, this exemption protects homeowners from school taxes. Since it stacks with the previous exemption, this can mean seniors will see smaller school tax bills, sometimes none at all. Like the homestead, the over-65 exemption saw a massive increase to end 2025, going from a cut of $10,000 to $60,000. When combined with the homestead, this translates into a reduction of $200,000. For many homes, this will eliminate the school tax burden for seniors entirely, potentially saving them thousands of dollars.
Disabled Exemption
Like the over-65 plan, the disabled exemption protects a vulnerable population from rising school taxes. This was originally a $10,000 exemption, but it was increased to $60,000 in 2025. This can be applied with the homestead exemption to get a total savings of $200,000. However, it cannot be used with the over-65 exemption, meaning you must choose one if you qualify for both. Like the others, this cut could be enhanced in the near future. Since the new version provides substantial relief, it is a must for any disabled homeowner to apply for this benefit.
Exemption Deadline for Current Bills is April 30
You have between January 1 and April 30 to apply for various exemptions if you want them to apply to the current tax year. This means if you want to get a reduction on the tax bill coming in the fall, you must do so by April 30. You can apply for exemptions at any time, but they will be applied to later bills. More flexibility was added in 2022, as you had previously needed to have applied in January to get the current exemption.
Thankfully, the homestead exemption can be applied retroactively, up to two years in the past, while the over-65 exemption can be applied for just one year. Retroactive exemptions must be filed by the delinquency date of the year you wish to apply for. For example, if you want to apply for an exemption for the tax year of 2024, you must do so by January 31, 2027, as the delinquency date would be February 1. If you manage to land a retroactive exemption, you will receive a refund from the county for the overpayment. You can apply for retroactive benefits and current ones at the same time, but this must be done by April 30. We wrote an article that covers the basics of deadlines when it comes to Texas, which is always good to have in mind.
O’Connor can Help in all Aspects of Property Taxes
Texas property tax law, especially exemptions, has seen many changes in just the last few years. There is more to come as well, as many legislative ideas are being to lower taxes further. With affordability becoming a national buzzword, more cuts, changes, and tweaks are soon to follow. These can be tough to keep track of, and we at O’Connor are here to help. For over 50 years, we have been serving Texas and the rest of the nation when it comes to property tax issues. Based in Houston, we know Texas like no other firm and understand how to maximize your savings with exemptions and other techniques.
Property tax appeals work wonders alongside exemptions. Appeals of all types can lower your initial taxable value, allowing the exemptions to shrink it even further. They can also be used in situations where exemptions cannot help, such as rental properties. The deadline for property tax appeals is May 15, though some counties may extend it. With your exemptions established, your appeals filed, and your assessment reviewed, you can take comfort in the fact that you are only paying what you should and not a penny more. We will give you advice on exemptions free of charge and will only ask for a contingency fee if our appeals can lower your taxes. If your protest yields no results, you owe us nothing.
