Texas Property Tax Law Changes 2026: What the 89th Legislature Actually Changed (And What It Didn't)

What Did the 89th Texas Legislature Change About Property Taxes?

Texas collected a record $125.05 billion in property taxes in 2024 — the highest total in state history. Lawmakers responded with the most sweeping package of property tax changes since the $18 billion reform package of 2023. The combined reforms save the average homeowner roughly $1,762 per year.

But here's what most homeowners don't realize: every single one of these changes affects your taxable value or your tax rate. Not one of them touches your appraised value — the number your Appraisal District assigns to your home.

If that number is wrong (and 30–60% of properties are over-assessed), you're still overpaying. Even with all the new savings.

Here's a breakdown of every major change — and what each one actually means for your tax bill.

How Much Is the Texas Homestead Exemption in 2026?

The mandatory school district homestead exemption jumped from $100,000 to $140,000 under Senate Bill 4. Voters approved the constitutional amendment (Proposition 13) in November 2025 with 79% support. That's a 40% increase — the largest single jump in Texas history.

What does this mean in dollars? If your school district tax rate is $1.21 per $100 of assessed value (near the state average), the extra $40,000 in exemption saves you about $484 per year.

Here's how it works:

• Your Appraisal District sets your home's appraised value
• The exemption subtracts $140,000 from that value for school tax purposes only
• You pay school taxes on whatever remains

So if your home is appraised at $350,000, you'd pay school taxes on $210,000 instead of the full amount. That's a real savings — but it only applies to school district taxes, not city, county, or special district levies.

One thing to note: the exemption doesn't reduce your appraised value itself. It reduces the taxable value derived from it. That distinction matters more than most people think.

Think of your appraised value as the sticker price and the exemption as a coupon. A bigger coupon helps — but if the sticker price is inflated by $50,000, you're still overpaying even after the discount. The exemption and a protest solve two different problems.

What Changed for Texas Seniors and Disabled Homeowners?

Seniors 65 and older got the biggest dollar-for-dollar boost of any group. The additional school district exemption for seniors and disabled homeowners jumped from $10,000 to $60,000. That's a 500% increase.

When you stack it on top of the standard $140,000 homestead exemption, seniors now have a combined $200,000 in school district exemptions. For a senior with a $300,000 home, that means paying school taxes on just $100,000 of value.

And don't forget the tax ceiling. Once you turn 65 and have a homestead exemption in place, your school district taxes are frozen at that year's amount. Even if your appraised value goes up later, your school tax bill won't. Some cities and counties offer their own freezes too.

What most seniors miss: Even with a $200,000 exemption and a tax freeze, your appraised value still matters. City, county, hospital district, and MUD taxes don't get the same exemption. If your appraisal is $50,000 too high, you're overpaying on every non-school levy — and those make up roughly half your total bill.

How Does HB 8 Cut School Tax Rates?

House Bill 8 delivers a temporary one-year school tax rate reduction of $0.0331 per $100 of assessed value. On a $350,000 home (after the $140,000 exemption), that saves roughly $70 for the 2025 tax year.

It's not a massive number on its own. But it stacks with the exemption increase. The rate cut applies automatically — you don't need to file anything.

The key word here is "temporary." This is a one-year compression, not a permanent rate change. The legislature can extend it, but there's no guarantee. Your appraised value, on the other hand, resets every year based on whatever the Appraisal District decides your home is worth.

Rate cuts and exemptions are temporary levers. Protesting your appraised value is the one move that directly corrects the base number everything else is calculated from.

What Are the New ARB Transparency Rules Under HB 1533?

This might be the most underrated change of the entire session. House Bill 1533 rewrites the rules for how Appraisal Review Board hearings work — and it tips the balance toward homeowners.

1. Appraisal districts must share evidence 14 days before your hearing.

Before HB 1533, you could walk into an ARB hearing and get blindsided by evidence you'd never seen. The district could present comparable sales, photos, or market data for the first time — and you'd have minutes to respond.

Now, the Appraisal District must disclose all evidence it plans to use at least 14 days before your hearing date. That's a game-changer for anyone preparing a protest.

2. More time to prepare for good-cause hearings.

The notice period for good-cause hearings increased from 5 to 15 days. If you need to reschedule or your hearing gets moved, you'll have triple the time to adjust.

3. Remote hearing access is now guaranteed.

HB 1533 ensures homeowners can participate in ARB hearings by phone or video conference. You don't need to take a day off work to sit in a government building.

4. Tenants get protest rights too.

If you're a tenant who's contractually responsible for paying property taxes (common in commercial leases), you now have the right to pursue binding arbitration for properties appraised at $5 million or less.

The 14-day evidence rule alone could shift thousands of ARB outcomes. When homeowners know what evidence the district will use, they can prepare counterarguments — comparable sales that tell a different story, photos showing property condition, or market data the district overlooked. That kind of preparation is exactly what drives the 80–91% informal protest success rate Texas already sees.

Does HB 9 Help Landlords and Small Business Owners?

Yes — but only for business personal property, not real estate. House Bill 9 exempts up to $125,000 of business personal property from taxation by all taxing entities.

Business personal property includes equipment, furniture, inventory, and supplies — the stuff inside your building, not the building itself. If you own a small business or rental property with furnishings, this could shave a few hundred dollars off your annual tax bill.

For landlords, the bigger opportunity is still protesting the appraised value of the property itself. Rental properties don't qualify for homestead exemptions, so your entire appraised value is taxable. If the Appraisal District has your fourplex valued 15% too high, that overvaluation hits every single taxing entity — school, city, county, and special districts.

Do I Still Need to Protest My Texas Property Taxes in 2026?

Absolutely. In 2022, Texas homeowners filed 2.7 million property tax protests — a statewide protest rate of 12.2%, up from 6.5% in 2014. That surge happened because homeowners realized exemptions weren't solving the core problem.

The core problem is your appraised value. Every exemption, rate cut, and freeze is applied after the Appraisal District sets that number. If the number is wrong, everything downstream is wrong too.

Here's why protesting still matters even after all the 2026 changes:

Exemptions reduce taxable value. Protests reduce appraised value. They solve different problems. You should do both.

Only about 5% of homeowners actually protest. Most assume the Appraisal District got it right — or that the new exemptions make protesting unnecessary. Neither is true. And when homeowners do show up with evidence, the success rate runs between 80% and 91%.

Over-assessment is widespread. The National Taxpayers Union estimates that 30–60% of all properties are over-assessed. In a state with no income tax and property taxes averaging over $4,500 per year, the dollar impact of an incorrect appraisal is amplified.

Your protest compounds. When you successfully lower your appraised value, that lower number becomes the baseline for next year's appraisal. Texas caps annual increases at 10% for homesteaded properties. Starting from a lower base means slower growth — and lower taxes — for years to come.

Homeowners who claim the exemption and protest save significantly more than those who do just one or the other. The exemption is a fixed discount. The protest is a correction. You need both.

How to Protest Your Texas Property Taxes Before May 15

Your deadline to file a protest is May 15, 2026 (or 30 days after you receive your Notice of Appraised Value, whichever is later). Here's the process:

Step 1: Check your appraisal notice. Your county Appraisal District mails your Notice of Appraised Value between April 1 and mid-May. Look at the "market value" line — that's the number you're protesting.

Step 2: File your protest. You can file online through your county Appraisal District's website, by mail, or through a service like TaxDrop. Check the box for "value is over market value" — this is the most common (and most successful) protest ground.

Step 3: Gather evidence. Thanks to HB 1533, your Appraisal District must now share its evidence 14 days before your hearing. Use that time to pull comparable sales, document any property condition issues, and identify errors in your property record.

Step 4: Attend your hearing (or let someone do it for you). Most protests settle informally — you or your representative meet with an appraiser, compare evidence, and negotiate. If you can't agree, it goes to the ARB. Either way, you can now attend remotely.

Before and After the 2026 Changes: A Side-by-Side Comparison

Here's what the full package looks like for a typical Texas homeowner with a $400,000 home:

Non-Senior Homeowner ($400,000 home):

• Before 2026 school homestead exemption: $100,000 → School taxable value: $300,000
• After 2026 school homestead exemption: $140,000 → School taxable value: $260,000
• Annual savings from exemption increase: ~$484

Senior Homeowner ($400,000 home):

• Before 2026 combined exemption: $110,000 → School taxable value: $290,000
• After 2026 combined exemption: $200,000 → School taxable value: $200,000
• Annual savings from exemption increase: ~$1,089

After a successful protest (−$50,000 reduction to appraised value):

• New appraised value: $350,000
• Non-senior school taxable value: $210,000 (saves additional ~$605/year)
• Senior school taxable value: $150,000 (saves additional ~$605/year)
• Plus savings on city, county, and special district taxes

The protest is the move that changes the game. A successful protest doesn't just save you money this year — it resets your base value going forward.

The Bottom Line: Exemptions Are a Start. Protesting Finishes the Job.

The 89th Legislature gave Texas homeowners real relief. The $140,000 homestead exemption, the $60,000 senior exemption, the HB 8 rate cut, and the HB 1533 transparency reforms all make a difference.

But none of them fix the foundational number: your appraised value.

If that number is even 10–15% too high — and for millions of Texas homeowners, it is — you're overpaying on every tax bill, from every taxing entity, every single year. The exemption applies a discount. The protest corrects the price.

Your Notice of Appraised Value is on its way. When it arrives, don't just check for the exemption. Check the appraisal itself. And if something looks off, protest before May 15.

See your potential savings → Start your Texas property tax protest with TaxDrop