--- title: "Austin Property Taxes Explained: Homestead Exemptions, the 10% Cap and What Buyers and Sellers Should Know" url: https://heatherpowellgroup.com/austin-property-taxes-homestead-exemption-guide/ type: post date: 2026-10-23 modified: 2026-10-23 markdown_url: https://heatherpowellgroup.com/austin-property-taxes-homestead-exemption-guide.md author: "Heather Powell" --- # Austin Property Taxes Explained: Homestead Exemptions, the 10% Cap and What Buyers and Sellers Should Know Texas has no state income tax, which is one reason so many people move here. But local governments fund schools, roads and services through property taxes, so they're a meaningful part of the cost of owning a home in Austin. The good news: Texas offers real protections for homeowners, if you know how to use them. *This article is general information, not tax or legal advice. Consult a tax professional or the Travis Central Appraisal District for your specific situation.* ## How Austin property taxes work Your annual tax bill is based on two things: - **Your home's appraised value**, set each year by the appraisal district (Travis Central Appraisal District for most of Austin) - **The combined tax rates** of every taxing unit your property falls in: county, school district, city, community college, hospital district and any special districts Because those jurisdictions vary, two homes of the same value in different parts of the metro can have very different tax bills. Always look at a specific property's tax history before you buy. ## The homestead exemption: the biggest savings for owners If the home is your primary residence, you can file for a **residence homestead exemption**. Key points: - **School district exemption of $140,000.** Texas voters approved raising the school district homestead exemption from $100,000 to $140,000, effective for the 2025 tax year. - **Over-65 or disabled homeowners** receive an additional $60,000 school district exemption plus a school tax ceiling that limits future increases. - **Other local exemptions** may apply. Some taxing units offer a percentage homestead exemption. - **How to apply:** File Form 50-114 with the appraisal district. It's free, and you only need to file once for as long as you own and live in the home. You'll need a Texas driver's license or ID showing the property address. Watch out for companies that mail official-looking offers to file your homestead exemption for a fee. You can do it yourself for free. ## The 10% homestead cap Once your homestead exemption is in place, the **taxable value of your homestead can't increase more than 10% per year**, even if the market value rises faster. It's one of the most valuable protections in Texas for long-term owners. (Note: the cap resets when a home sells, which matters for buyers. More on that below.) ## Protesting your appraisal Every spring, appraisal districts mail notices of appraised value. If you believe your value is too high, you can protest. The deadline is generally **May 15 or 30 days after your notice is mailed, whichever is later**. Many Austin homeowners protest annually, and in a softening market, recent comparable sales can be compelling evidence. ## What buyers should know - **Don't budget using the seller's tax bill.** The seller may have a homestead exemption, an over-65 ceiling, or a capped value that won't transfer to you. After you buy, the home may be reappraised closer to your purchase price. - **File your homestead exemption promptly** after you move in. Texas allows new owners to apply in the same year they buy, once the home is their primary residence. Check with the appraisal district on how the exemption is applied for your purchase year. - **Ask for the tax rate breakdown** of any home you're considering. Special districts (such as MUDs in some suburban communities) can add significantly to the rate. ## What sellers should know - **Property taxes are prorated at closing.** You'll pay your share for the portion of the year you owned the home, typically based on the prior year's taxes. - **A lower tax bill can be a selling point.** If the home is in a lower-rate area, we'll highlight it in your marketing. ## Frequently asked questions ### What is the homestead exemption in Texas for 2026? The school district residence homestead exemption is $140,000, following voter approval in 2025. Homeowners 65 and older or disabled receive an additional $60,000 school district exemption plus a school tax ceiling. Other local exemptions may also apply. ### When is the deadline to file a homestead exemption in Travis County? The standard deadline is April 30 of the tax year, but late applications can be filed up to two years after the delinquency date. Filing is free through the Travis Central Appraisal District. ### Do property taxes go up when you buy a house in Texas? Often, yes. The seller's exemptions and 10% cap don't transfer to the buyer, and the home may be reappraised closer to its sale price. Budget based on the full appraised value and current tax rates, not the seller's last bill. ## Questions about a specific property? We're happy to pull the tax history and jurisdictions for any Austin home you're considering. Use our [mortgage calculator](https://heatherpowellgroup.com/calculator/), read our [Buyer's Guide](https://heatherpowellgroup.com/buyers-guide/), or [get in touch](https://heatherpowellgroup.com/contact-lets-connect/).