Mortgage glossary
Homestead exemption (Texas)
Definition: A Texas homestead exemption reduces the taxable value of a home that is the owner's principal residence, lowering the property tax bill and limiting how fast the taxable value can rise.
Texas homeowners apply with their county appraisal district, such as the Travis Central Appraisal District for Austin, once they own and live in the home. Exemption amounts are set by state law and local taxing units, with additional exemptions for homeowners 65 or older and for disabled veterans. A homestead also qualifies for a yearly cap on increases in its appraised value.
Because Texas relies heavily on property taxes, filing promptly can meaningfully reduce the escrow portion of your payment. Homestead status also triggers Texas's special constitutional rules for home equity loans and HELOCs.
Related terms
Reviewed by Kyle Richardson, NMLS #863464. General information, not advice for your specific situation. All glossary terms
Ready when you are.
Start your full application in about 10 minutes, or call and talk to a real person on the team.
Not ready to apply? See your options in 60 seconds