Texas voters just raised your homestead exemption to $140K

Texans passed two property tax amendments last night, and most people are only hearing about one of them.

Proposition 13 gets the headlines. It raises the school district homestead exemption from $100,000 to $140,000. That is the change you will see on TCAD, WCAD, HCAD, and BCAD websites this week.

Proposition 11 is the sleeper. It bumps the additional exemption for homeowners who are 65 or older, or disabled, from $10,000 to $60,000. If you fall into that group, your combined exemption goes from $110,000 to $200,000. That is a real number, not a rounding error, and most reporting has barely touched it.

Both took effect January 1, 2026, but apply retroactively to the 2025 tax year. Bills already mailed in October 2025 went out at the old $100K exemption; appraisal districts are now issuing revised statements or applying the higher exemption through escrow analysis credits over the coming months.

This is also the second major homestead increase in two years. Proposition 4 in 2023 took the general exemption from $40,000 to $100,000. November 2025 Prop 13 takes it the next step to $140,000. Texas has spent two elections in a row using homestead policy to soak up appraisal growth instead of touching the underlying tax rates. There is a real fiscal-political reason for that, but the practical result for homeowners is a bigger exemption stack.

Here is what actually changes for you.

The numbers that matter

The school district homestead exemption is a flat dollar amount that comes off your home appraised value before the school portion of your property tax gets calculated. It only applies to your primary residence. If you own a rental, a vacation property, or a second home, none of this touches them.

For tax years 2025 and forward:

• General homestead exemption: $140,000 (up from $100,000)
• Over-65 or disabled add-on: $60,000 (up from $10,000)
• Combined for qualifying seniors and disabled homesteaders: $200,000

These amounts stack with the 10 percent appraisal cap, which limits how much your taxable homestead value can climb year over year. They are also separate from disabled veteran exemptions under Texas Tax Code 11.131 and 11.22, which I cover on my Texas homestead exemption page.

What this saves you, with real math

Property tax savings depend on your school district rate. Most Texas school districts charge between $1.00 and $1.20 per $100 of taxable value. I will use $1.10 as a typical figure, which is roughly where Austin ISD, Round Rock ISD, and Dripping Springs ISD all sit currently.

Take a homeowner with a $445,000 Austin metro home, which is right around the current MSA median sold price per Unlock MLS.

Before Prop 13: $445,000 minus the old $100,000 exemption equals $345,000 taxable. At $1.10 per $100, school tax owed is roughly $3,795 per year.

After Prop 13: $445,000 minus the new $140,000 exemption equals $305,000 taxable. School tax owed is roughly $3,355 per year.

Net savings: about $440 per year for a typical working-age homeowner (assuming the $1.10 per $100 school rate noted above).

Now run the same scenario for a homeowner over 65 who qualifies for both the general exemption and the new $60,000 senior add-on. Their combined exemption goes from $110,000 to $200,000. Their school tax base drops by $90,000. Savings: roughly $990 per year compared to the prior setup.

If you are on a fixed income at 65 or older, that is a tank of gas every month or a utility bill every other month. It compounds across the years you stay in the home.

One thing this does NOT do

The new exemption applies only to the school district portion of your property tax bill. Everything else stays where it was:

• County tax (Travis, Williamson, Hays, Bastrop, etc.)
• City tax
• MUD or PID assessments
• Hospital district
• Community college district
• Special improvement districts

These run their own budgets and set their own rates. If your county or city raises their rate next year (which several Austin metro entities have been doing), that increase offsets some of the homestead savings.

School district taxes are typically 40 to 55 percent of a Texas homeowner total bill. That is the biggest single line item, but it is not everything.

How to claim it (and the one mistake people make)

If you already have a homestead exemption on file with your county appraisal district, the higher amount applies automatically. You do not have to refile. Do not pay anyone who tells you otherwise. There are predatory "homestead protection" services that charge $40 to $80 to file an exemption you can file yourself for free, and they will absolutely lean into the news of the change to drum up business.

If you do not have a homestead exemption on file:

• Confirm you live in the home as your primary residence as of January 1 of the tax year you are claiming
• File the application directly with your county appraisal district. There is no fee.
• You can file any time once you own and occupy the property as your primary residence
• April 30 is the standard filing deadline for that year coverage, though late filings up to two years back are commonly accepted

The mistake most people make: turning 65 and assuming the county will move them onto the senior exemption automatically. They will not. You have to file an updated application that includes proof of age. Same for becoming disabled. The county appraisal district does not get notified by the Social Security Administration or the VA.

If you have turned 65 since your last application and have not claimed the senior exemption, you are leaving up to about $990 a year on the table. Fix it.

How this affects your mortgage

If your property taxes are escrowed (most are), your annual escrow analysis should show a lower projected tax bill in 2026 than in 2025. Lenders run escrow analysis once a year, typically on the loan anniversary. If your account holds extra reserve based on the old exemption, you will see a refund check or a reduced monthly escrow payment after the next analysis. Do not be surprised when it shows up. It is the lender doing the math correctly, not a mistake.

If you are buying right now, your pre-approval needs to use the corrected tax assumption. Most lenders pull the prior year actual tax bill or estimate a percentage of purchase price. With the higher exemption in effect for 2025, properties you are looking at right now have lower effective tax burdens than they would have under the old rules. On marginal qualification scenarios, the corrected math is the difference between approval and "let us restructure." If your DTI was tight, ask your loan officer to re-run with the corrected assumption.

For first-time buyers thinking through affordability: Texas remains a structurally cheaper state on the property tax front than the headlines suggest, in part because of how the homestead exemption stacks against the 10 percent appraisal cap. The flip side: investors and second-home owners do not get this treatment. That asymmetry is part of why owning a primary residence in Texas works better than the published tax rates would imply.

For the full picture, including dollar-by-dollar examples at every price point and a county-by-county effective tax rate breakdown, see my Texas homestead exemption page.

If you want help running this against a specific scenario or working out whether your escrow analysis is going to give you a refund or a payment drop, send me your numbers. No commitment.