A homestead exemption lowers your property tax bill by reducing the taxable portion of your home's value. It's only available for your primary residence—not rental properties or second homes.
In Texas, the general homestead exemption removes $100,000 from your home's taxable value for school district taxes. If your home is assessed at $400,000, you'd only pay school taxes on $300,000. Additional exemptions exist for seniors (65+), disabled homeowners, and disabled veterans.
California's homestead exemption works differently. It protects home equity from creditors (up to $300,000-$600,000 depending on circumstances) but doesn't directly reduce property taxes. California homeowners benefit from Prop 13's 2% annual assessment cap instead.
If you own and live in your home in Texas, the homestead exemption is free money. The $100,000 school tax exemption alone saves most homeowners $1,000-$1,500 per year.
The problem? You have to apply. It's not automatic. And many homeowners—especially first-time buyers—don't know it exists.
Important: The homestead exemption reduces your taxable value, but it doesn't fix an inflated assessed value. If your county overvalued your property, you'll still benefit from filing a property tax appeal on top of your exemption.
James bought a home in Harris County, Texas assessed at $350,000. He filed for his homestead exemption.
School taxes before exemption: $350,000 × 1.1% = $3,850
School taxes after exemption: $250,000 × 1.1% = $2,750
Savings from exemption alone: $1,100/year
James also noticed comparable homes were selling for $320,000. He filed a property tax appeal and got his assessed value reduced to $325,000—saving an additional $550 across all taxing entities.
Total annual savings: $1,650
File Form 50-114 with your county appraisal district. You can apply online, by mail, or in person. You must own and occupy the home as your primary residence as of January 1. Apply by April 30 for the current tax year, though late applications are accepted up to two years back.
The regular deadline is April 30. However, you can file a late application up to two years after the deadline and receive the exemption retroactively. There's no penalty for late filing—you just can't go back more than two years.
No. Homestead exemptions only apply to your primary residence—the home where you live. Investment properties, vacation homes, and rentals don't qualify.