A homestead exemption reduces the taxable value of a home for certain property taxes. That can lower the property tax bill for a homeowner who owns and occupies the home as a principal residence.
Who may qualify?
In general, a homeowner must have an ownership interest in the property and use the property as the principal residence. The homeowner also must state that they do not claim a residence homestead exemption on another property in or outside Texas.
Additional exemptions may be available for homeowners age 65 or older, disabled homeowners, disabled veterans, surviving spouses, and certain other categories.
What the exemption does
The general residence homestead exemption removes a portion of the home's value from taxation. School districts are required to provide a residence homestead exemption, and other taxing units may offer local-option exemptions.
Exemption amounts can change, so homeowners should verify current information with the Texas Comptroller and their county appraisal district.
How to apply
You apply through the county appraisal district where the property is located. The application generally requires proof of ownership and residency, and the address on your Texas driver's license or state ID may need to match the property address unless an exception applies.
There is NO fee for applying for a homestead exemption, and the process is simple. Beware of companies offering to process your application for a fee. Their offers may come in official-looking envelopes, but they are scams. Again, filing for a homestead exemption is free.
Why mortgage borrowers should care
Property taxes affect the cost of owning the home and may affect the escrow portion of your mortgage payment. If your exemption reduces your tax bill, it may eventually affect your escrow analysis and monthly payment.
For current rules and forms, start with the Texas Comptroller's property tax exemptions page and your county appraisal district.