Texas Property Tax 2026: $100,000 Homestead, SB 2 Reforms and May 15 Protest Deadline

Texas has no state income tax and funds most local services through property tax — a design that pushes effective rates among the highest in the nation. The 2023 Senate Bill 2 reforms (implemented over 2024-2026) tripled the school district homestead exemption to $100,000, added a circuit breaker for non-homestead properties under $5 million, and compressed school district M&O tax rates. This 2026 guide walks through the exemptions, the May 15 protest deadline, and the 2025 legislative changes still being phased in.

How Texas Property Tax Is Calculated

Texas assesses and collects property tax at the county appraisal district and local taxing unit level. There is no statewide property tax. Each property is:

1. Appraised at market value by the county appraisal district (CAD) as of January 1 each year.
2. Assessed (with exemptions applied) to produce taxable value.
3. Taxed by multiple overlapping taxing units — county, city, school district, and often one or more special districts (MUD, emergency services, community college, etc.).

Combined tax rates for Texas residential property commonly range from 1.8% to 2.5% of market value, with some Houston and Austin suburbs exceeding 3% when MUD and PID special districts apply.

The 2023 SB 2 Reforms (Implemented 2024-2026)

Senate Bill 2 of the 88th Legislature (3rd called session, 2023) was the largest Texas property tax reform in a generation. Key elements now in effect:

School district homestead exemption increase

Raised from $40,000 to $100,000. For over-65 and disabled homeowners, the additional school district exemption rose from $10,000 to $60,000, creating a combined exemption of $160,000.

Over-65 school tax ceiling (tax freeze)

Already in effect, this ceiling freezes the school district tax amount at the level paid in the year the homeowner turned 65 (or became disabled). The 2023 reforms did not alter the ceiling mechanism but increased the underlying exemption, reducing the ceiling amount for all seniors who qualified after 2023.

School district M&O rate compression

The state compressed school district Maintenance & Operations (M&O) tax rates by an additional 10.7 cents per $100 over 2024-2025. This is the rate the state effectively reduces on your behalf by replacing it with state-level recapture funding.

Circuit breaker for non-homestead — 20% appraisal cap

Real property under $5 million in appraised value that is not a homestead is subject to a temporary 20% appraisal cap. This is a pilot program that runs through tax year 2026 and may be renewed. It primarily benefits small rental property owners and small commercial owners.

Proposition 13 (November 2025) — pending further increase

Texas voters approved SB 4/Proposition 13 in November 2025, which would raise the school district homestead exemption from $100,000 to $140,000. Final implementation is being phased in; for tax year 2026 the $100,000 figure remains the working number pending completion of the compliance process.

Homestead Exemption — File by April 30

The Texas homestead exemption is not automatic. You must file Form 50-114 (Application for Residence Homestead Exemption) with your county appraisal district. A first-time homeowner has two years from the qualifying date to file, and late applications can be accepted for up to two years. For the current tax year's bill, file by April 30.

Who qualifies

• The property is your principal residence as of January 1 of the tax year
• You own an ownership interest in the property
• You (or the qualifying occupant for certain exemptions) occupy the property

Components of the homestead exemption

• School district exemption: $100,000 off appraised value for school tax (SB 2 / 2023)
• County homestead exemption: Optional, up to $3,000 per Texas Tax Code 11.13(n), or a percentage up to 20% set by the county
• City homestead exemption: Up to 20% of appraised value, minimum $5,000, if offered by the city
• Over-65 exemption: Additional $10,000 school tax exemption + the $60,000 SB 2 increase = $70,000 additional. Plus a school tax ceiling freezing school tax at the year-65 level.
• Disabled exemption: Same as over-65 ($10,000 + $60,000 = $70,000 additional + school tax ceiling). Cannot be combined with over-65 — claim the one that produces the larger benefit.
• Disabled Veteran exemption: Sliding scale based on VA disability rating, from $5,000 (10-29%) up to $12,000 (70%+). For 100% permanently disabled veterans: full exemption on the entire homestead.
• Surviving Spouse of a KIA servicemember: full exemption on homestead.

Protesting Your Appraisal — May 15 Deadline

Every Texas homeowner has the right to protest the appraised value set by the county appraisal district. The deadline is May 15 of the tax year, or 30 days after the Notice of Appraised Value is delivered, whichever is later.

Step 1: Informal review

Contact the appraisal district (most have online tools) to review the appraisal. Many districts offer an online settlement process. If the appraiser agrees your value is high, they may reduce it without a formal hearing.

Step 2: File Notice of Protest (Form 50-132)

By May 15 (or the 30-day deadline if later), file with the Appraisal Review Board (ARB). Filing is free. Online filing is available in most Texas counties. You protest on specific grounds: (a) the value is higher than market, or (b) the value is unequal compared to similar properties.

Step 3: Informal conference with the appraiser

Before the formal ARB hearing, most districts offer an informal conference where an appraiser reviews your evidence. Many protests resolve here.

Step 4: Formal ARB hearing

Present evidence (comparable sales, photographs of condition issues, independent appraisals, etc.). The ARB is a panel of three citizens; they issue a written decision within 30 days.

Step 5: Appeals from ARB

• Binding arbitration: For properties up to $5 million, an alternative to court. File within 60 days of ARB order, $450-$1,550 deposit.
• State Office of Administrative Hearings (SOAH): For higher-value commercial property.
• District court: For any property value. File within 60 days of ARB order.

Property Tax Deferral for Seniors and Disabled

Texas Tax Code 33.06 allows homeowners age 65+ or disabled to defer payment of property tax on their homestead for as long as they continue to own and occupy the home. Unpaid tax accumulates as a lien with interest (5% per year, which is below-market), repaid when the property is sold or transferred.

Deferral is valuable for cash-strapped seniors, but the accrued tax and interest reduce the inheritance available to heirs. File Form 50-126 with the appraisal district to start deferral. Taxes that were already delinquent before deferral remain subject to normal penalties.

Payment Schedule and Penalty

Texas property tax statements are mailed in October by the county tax assessor-collector. Payment is due in full by January 31 of the following year to avoid penalty and interest. Partial payment or quarterly installment plans are available for over-65 and disabled homeowners.

Delinquency escalates rapidly:

• February: 6% penalty + 1% interest = 7%
• March: adds 1% per month
• July 1: 12% total penalty + 6% interest + attorney collection fees (up to 20% of unpaid amount)

Continued delinquency leads to tax suit and judicial foreclosure. Texas has the fastest property tax enforcement cycle in the United States; contact your tax office immediately if you cannot pay.

Frequently Asked Questions

What is the Texas homestead exemption for 2026?

The school district homestead exemption is $100,000 for the 2026 tax year (under SB 2 enacted in 2023). Over-65 and disabled homeowners receive an additional $60,000 school district exemption, for a combined $160,000. County and city homestead exemptions are optional local add-ons that vary by jurisdiction. File Form 50-114 with your appraisal district by April 30 to apply for the current tax year.

When is the Texas property tax protest deadline?

May 15, or 30 days after the Notice of Appraised Value is delivered, whichever is later. File Form 50-132 (Notice of Protest) with your county appraisal district's Appraisal Review Board. Filing is free and online filing is available in most counties. Missing this deadline forfeits your right to appeal for the tax year.

What is the SB 2 circuit breaker in Texas?

Texas Senate Bill 2 (2023) included a circuit breaker for real property valued under $5 million that is not a homestead — the appraised value cannot rise more than 20% per year. This is a pilot program through the 2026 tax year that may be renewed. It benefits small rental and commercial property owners.

How do I qualify for the over-65 exemption in Texas?

Turn 65 during the tax year. File Form 50-114 with your appraisal district and select the over-65 option. The exemption adds $10,000 + $60,000 school district exemption on top of the $100,000 general homestead, and activates the school tax ceiling that freezes your school district tax bill at the year-65 level. The ceiling is transferable if you move to another Texas primary residence.

Does Texas have a property tax deferral for seniors?

Yes. Under Texas Tax Code 33.06, homeowners age 65+ or disabled may defer property tax on their homestead indefinitely. Unpaid tax accrues 5% annual interest and is repaid when the property is sold or transferred. File Form 50-126 with your county appraisal district. Taxes already delinquent before the deferral are not shielded from normal penalty and interest.