How Does Homestead Exemption Work in Texas? A Guide for First-Time Home Buyers — Dallas Buyers Expert
- Nitin Gupta, CRS, REALTOR
- 2 hours ago
- 3 min read
The Texas Homestead Exemption can significantly reduce your property taxes by lowering the taxable value of your primary residence. It also protects you from sharp increases in taxable value over time. If you’re buying your first home in Texas, this is a benefit you should take advantage of as soon as you become eligible.
What Is a Homestead Exemption?
A homestead exemption is a property-tax benefit that:
Applies only to your primary residence
Reduces the taxable value of your home
Is free to apply for and simple to maintain
Protects against rapid increases in taxable value each year
You can only claim one homestead exemption in Texas — and only on the home where you actually live.
Who Qualifies?
You are eligible if:
You own the home, and
You occupy it as your primary residence
Vacation homes, rentals, and investment properties do not qualify.
How Much Does the Homestead Exemption Save?
As of recent law updates, Texas homeowners benefit from:
Exemption Type | Benefit |
General Homestead Exemption | Large reduction in taxable value for the school-tax portion |
Optional Local Exemptions | Some counties, cities, and special districts reduce taxable value further — sometimes up to 20% |
Example If your home is valued at $300,000:
The exemption reduces the taxable value
You are taxed as if your home is worth significantly less
Savings vary depending on local tax rates, but can be hundreds or even thousands of dollars per year
Homestead Cap — Ongoing Protection from Rising Taxes
Once approved:
Your home’s taxable value cannot increase by more than 10% per year
Market value may change more than that, but taxes are limited on the increase
This protects homeowners in appreciating markets — like fast-growing DFW — from sudden tax jumps.
How to Apply (It’s Free)
Obtain the Residence Homestead Exemption form (Form 50-114) from your county appraisal district
Provide your Texas driver’s license or ID showing the same property address
Submit your form to the county before May 1
Most homeowners only need to file once — it automatically continues each year unless you move or change ownership.
Additional Exemptions You May Qualify For
Some homeowners get even greater tax relief through additional exemptions:
65+ or Disabled Homeowners
Disabled Veterans
Surviving Spouses in qualifying circumstances
These can further lower taxable value or freeze certain taxes.
Why This Matters for First-Time Buyers
Texas property taxes are often higher than other states due to no state income tax — so taking advantage of exemptions is key to affordable homeownership.
Benefits for new homeowners:
Immediate annual tax savings
Increased affordability
Long-term budget predictability
Protected equity as home values rise
Quick Checklist
✔ Home is your primary residence
✔ Form 50-114 submitted to the county appraisal district
✔ Driver’s license updated to the same home address
✔ Apply once — benefit continues automatically
Call us at 469-269-6541 for more information about Frisco real estate!
FIND A LUXURY HOME IN FRISCO, TEXAS WITH NITIN GUPTA, BROKER ASSOCIATE, REALTOR®.
When purchasing a luxury home in Frisco, Texas, it’s essential to consider factors such as location, architectural style, security, and amenities to ensure the home meets both lifestyle and investment needs. By selecting a property in a prestigious neighborhood with numerous amenities and security measures, buyers can ensure they’re making a valuable and rewarding investment in the vibrant Frisco market.
For those looking to invest in luxury homes in Frisco, Texas, Nitin Gupta is an expert real estate professional ready to assist. Known for his extensive experience, market insights, and numerous awards, he is committed to finding his clients the best properties in the area.
Contact Nitin Gupta at 469-269-6541 or send a message today to explore exclusive listings and secure your ideal luxury residence in one of Frisco's elite communities.
