Homestead exemptions and appraisal caps
Several of these amounts changed in 2025, so this is where an older study guide can cost you points. All figures below are from the 2025 Texas Property Tax Code.
Exemption amounts
| Exemption | Amount | Section |
|---|---|---|
| Residence homestead, school district taxes | $140,000 | §11.13(b) |
| Additional homestead exemption for owners 65 or older or disabled, school district taxes | $60,000 | §11.13(c) |
| Residence homestead, county purposes under Article VIII, §1-a | $3,000 | §11.13(a) |
| Income-producing tangible personal property, per location in a taxing unit | $125,000 | §11.145(b) |
Note the words "school district" on the two big homestead amounts. A question about city or county taxes is not asking about the $140,000.
Disabled veterans
Section 11.22(a) sets the exemption by disability rating:
| Disability rating | Exemption up to |
|---|---|
| At least 10%, less than 30% | $5,000 |
| At least 30%, less than 50% | $7,500 |
| At least 50%, less than 70% | $10,000 |
| 70% and over | $12,000 |
A veteran who is 65 or older with at least a 10% rating, is totally blind in one or both eyes, or has lost the use of one or more limbs gets the $12,000 amount (§11.22(b)).
A veteran awarded 100% disability compensation by the VA, with a rating of 100% disabled or individual unemployability, is exempt on the total appraised value of the residence homestead (§11.131(b)).
The homestead appraisal cap
Under §23.23(a), a homestead's appraised value can go no higher than the lesser of its market value or the sum of last year's appraised value, 10% of last year's appraised value, and the market value of any new improvements. The cap starts on January 1 of the year after the owner first qualifies the home for a homestead exemption (§23.23(c)).
Example. A homeowner has had the homestead exemption for several years. Last year the home was appraised at $300,000. This year its market value is $360,000, with no new improvements. The cap allows $300,000 + $30,000 = $330,000, which is less than market value, so the appraised value is $330,000.
The 20% circuit breaker
Section 23.231 applies a similar limit to real property that is not a homestead, if its appraised value was at or under the dollar threshold in §23.231(j) for the year it first qualified. Appraised value can go no higher than the lesser of market value or last year's appraised value plus 20% of it plus new improvements (§23.231(d)). Residence homesteads and specially appraised land (such as open-space agricultural land) are excluded. The section expires December 31, 2026 (§23.231(k)).
Applications and timing
- Eligibility is generally decided by the owner's situation on January 1 (§11.42(a)). The main exception: the 65-or-older and disabled exemptions take effect as of January 1 of the year the owner qualifies and apply to that entire year (§11.42(c)).
- Applications are due before May 1 (§11.43(d)).
- A late homestead application is accepted up to two years after the delinquency date for the taxes (§11.431(a)). For disabled veteran exemptions the window is five years (§11.439(a)).
Try a question
A homeowner has qualified the property for the residence homestead exemption for several years. Last year the homestead had an appraised value of $300,000. This year its market value is $360,000. No new improvements were added. What is the maximum appraised value under the homestead limitation?
- A$360,000
- B$300,000
- C$330,000
- D$396,000
Show the answer
C. $330,000
Under §23.23(a), appraised value may not exceed the lesser of market value or the prior year's appraised value plus 10 percent of it plus new improvements: $300,000 + $30,000 + $0 = $330,000, which is less than the $360,000 market value.
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