Taxes for homebuyers

Homestead exemptions: lowering property tax on the home you live in

Many states and local governments reduce property taxes on a home you own and live in. These homestead exemptions are not automatic. New owners usually have to apply with the local appraisal district or property appraiser, often by a deadline early in the year. Filing on time can save hundreds or thousands of dollars a year.

Reviewed November 2026 · Written for Buy Home Tips from the sources listed below

Tax year: Tax figures on this page apply to the 2026 tax year. They were checked against IRS material in November 2026, and each figure is labelled with its year. Tax rules change; use the IRS instructions for the year you file.

Property tax is usually figured by applying local tax rates to your home's taxable value. A homestead exemption reduces that taxable value for an owner-occupied home. Rules, amounts and deadlines are set by each state and sometimes each local taxing unit, so the details below are examples. Check your own county.

Texas

The Texas Comptroller explains that Tax Code section 11.13(b) requires school districts to provide a $140,000 exemption on a residence homestead. Any taxing unit may also adopt a local option exemption of up to 20 percent of the appraised value, with a minimum of $5,000. Counties that collect certain farm-to-market or flood control taxes must provide a $3,000 exemption.

The Comptroller's own example: if a home is appraised at $300,000 and qualifies for the $140,000 school exemption, school taxes are figured as if the home were worth $160,000.

To qualify, you must have an ownership interest and use the home as your principal residence, and you must state that you do not claim a homestead exemption elsewhere. If you acquire the home after January 1, the Comptroller says you may receive the exemption for the applicable portion of that tax year if the previous owner did not receive it. You apply with your local appraisal district on Form 50-114.

Homeowners 65 or older or disabled receive an additional $60,000 school district exemption.

Florida

The Florida Department of Revenue says a homestead exemption can reduce a permanent residence's taxable value by as much as $50,000. Its PT-113 guide explains that the first $25,000 applies to all property taxes, including school taxes. The additional exemption of up to $25,000 applies to assessed value over $50,000 and only to non-school taxes, and is adjusted for inflation each January 1.

To qualify for a tax year, you generally must own the home and make it your permanent residence by January 1, then submit Form DR-501 to your county property appraiser by March 1. The homestead also qualifies the home for the Save Our Homes assessment limitation, and owners who move within Florida may be able to transfer, or port, some of that benefit.

Estimating your saving

The saving is roughly the exemption amount times the tax rate it applies to. Because exemptions can apply only to certain taxes, such as school taxes, use the rate for those taxes rather than your total rate.

Filing tips for new buyers

Find the right office. Texas uses county appraisal districts; Florida uses county property appraisers. Other states vary.
File early. Deadlines may be shortly after January 1, and late filing can cost you a year.
Have proof ready. Florida's guide lists items such as a Florida driver's license, vehicle registration and voter registration to prove residency.
Watch your escrow. Your servicer collects taxes based on estimates. After the exemption takes effect, the next escrow analysis should reflect the lower bill.
Look for more. Many states have extra exemptions for seniors, veterans and people with disabilities.

When you lose it

Exemptions are tied to living in the home. Florida says you are no longer eligible if the home is rented or is no longer your permanent residence. Tell the office if your use changes.

The bottom line

A homestead exemption lowers the taxable value of the home you live in. Check your state's amount and deadline, file soon after you move in and confirm the exemption on your next tax bill and escrow analysis.

Mini calculator: what an exemption saves

Enter your assessed value, the exemption amount and the tax rate it applies to. Rates differ by taxing unit, so use the rate from your own bill.

Assessed value ($)

Exemption amount ($)

Tax rate the exemption applies to (% of value)

Enter your figures to see the result. Nothing you type leaves this page.

Exemptions often apply only to some taxing units, such as the school district. Run it once for each unit with its own rate.

Claiming your homestead exemption

Find your county appraisal district or property appraiser's website.
Check the eligibility rules and the filing deadline.
Gather proof of ownership and residence, such as your ID and deed.
File the application as soon as you are eligible.
Check your next assessment notice to confirm the exemption.
Ask about extra exemptions for seniors, veterans or disability.

Questions buyers ask

What is a homestead exemption?

It is a reduction in the taxable value of a home you own and use as your primary residence. For example, Texas requires school districts to exempt $140,000 of a residence homestead's value, and Florida allows up to $50,000.

Is the homestead exemption automatic?

Usually not. You typically must apply. In Florida, the Department of Revenue says you submit Form DR-501 to your county property appraiser by March 1. In Texas, you apply with your local appraisal district using Form 50-114.

Can I get the exemption in the year I buy?

It depends on the state. Texas says owners who acquire property after January 1 may receive the exemption for the applicable portion of the year if the previous owner did not receive it. In Florida, you generally must own and live in the home by January 1.

Does a homestead exemption affect my escrow?

It can. If your taxes drop, your servicer's next escrow analysis should reflect the lower bill, which may lower your monthly payment.

Sources checked for this page

Checked November 2026. Programs and limits change; confirm with the source before you rely on a figure.