Stack 2: Costs & Taxes · 4 min read
Packing notes
- School districts must exempt $140,000 of a homestead’s appraised value.
- A buyer who closes after January 1 can claim it for the rest of that year if the seller did not have it.
- Apply before the first anniversary of your purchase; late applications are possible for up to two years after the delinquency date.
The residence homestead exemption is the single biggest tax break available to a Texas homeowner, and it is surprisingly easy to miss. It is not automatic: you have to apply to the appraisal district, once, for the home you live in. For a new Austin owner it can cut well over a thousand dollars a year from the school tax alone, and it starts a cap on how fast your taxable value can grow.
What the exemption does
Section 11.13 of the Texas Tax Code sets out several layers:
| Exemption | Who gives it | Amount |
|---|---|---|
| General homestead, school taxes | Every school district | $140,000 of appraised value |
| Local option percentage | Any taxing unit that adopts it | Up to 20% of appraised value, at least $5,000 |
| Age 65 or older, or disabled, school taxes | Every school district | An extra $60,000 |
| Age 65 or older, or disabled, local | Taxing units that adopt it | At least $3,000 |
The Comptroller gives a simple illustration: if your home is appraised at $300,000 and you qualify for the $140,000 school exemption, you pay school taxes as if it were worth $160,000. In Austin ISD, whose 2025 rate was 0.9252 per $100, the $140,000 exemption is worth about $1,295 a year.
Who qualifies
The Tax Code defines a residence homestead as a home owned by one or more individuals, designed for and used as a residence, and occupied as the owner’s principal residence, together with up to 20 acres of land used with it. A person may not receive the exemption on more than one homestead in the same year, and the application asks you to confirm that you do not claim a homestead exemption anywhere else, in Texas or another state.
Under Section 11.43, the application must include a copy of your driver’s license or state-issued personal identification certificate, with narrow exceptions. If you have just moved from another state, getting your Texas license at the new address first makes the paperwork simpler.
When a new buyer can claim it
Normally eligibility is decided by your situation on January 1. But Section 11.42 lets a person who acquires a home after January 1 receive the general homestead exemption for the rest of that tax year immediately on qualifying, provided the previous owner did not receive the same exemption for that year. If the seller already had it, your exemption starts on January 1 of the next year.
Deadlines
- If you owned and lived in the home on January 1, file before May 1 of that year.
- If you bought after January 1 and are claiming the partial year, file before the first anniversary of the purchase date.
- Missed it? Section 11.431 lets the appraisal district accept a late homestead application filed up to two years after the delinquency date for the taxes on the home.
How to apply in Travis County
The Travis Central Appraisal District accepts exemption applications by mail, online or at its office. Its page says a general residence homestead exemption is available to owners who own and live in the property as of January 1, and that the application must come with a driver’s license or state ID. Once granted, you do not need to reapply each year, though TCAD notes that state law requires it to audit exemption records every five years and it may ask you to reapply.
Tip: Apply as soon as you have moved in. The form takes minutes, and filing early means the exemption appears on your first full bill.
The 10 percent cap
The homestead exemption also unlocks a limit on appraisal increases. Under Section 23.23, starting on January 1 of the tax year after you first qualify, the appraisal district may not raise your home’s appraised value by more than 10 percent a year over the previous year’s appraised value, plus the value of new improvements. The cap ends once neither you nor your spouse or surviving spouse qualifies for the homestead exemption on the property, so it does not pass to the next buyer.
If you are 65 or older
Owners age 65 or older, or disabled, get an extra $60,000 school exemption, and TCAD notes that the over-65 exemption is available in the year you turn 65 and also sets a ceiling, often called a freeze, on the school taxes you pay. Some taxing units add their own exemptions for this group. A surviving spouse who was 55 or older when the qualifying spouse died may keep a local over-65 exemption on the same home.
Disabled veterans
Texas law also provides exemptions for disabled veterans. A veteran with a 100 percent service-connected disability rating, or individual unemployability, from the U.S. Department of Veterans Affairs is exempt from tax on the full appraised value of the residence homestead, and partial exemptions apply for lower ratings. TCAD lists these on its exemptions page.
Budgeting with the exemption
When you compare homes, estimate tax both ways: first at the full appraised value, then with the exemptions you will qualify for. For the full picture of rates and deadlines, see Texas Property Tax for Austin Homeowners: Rates, Deadlines and Protests, and for how the exemption fits into your first year as an owner, Buying a Home in Austin, Step by Step: From First Budget to Keys.