Texas Property Tax Protest Guide for New Homeowners 2026

Step 1: Apply for the Homestead Exemption Immediately

The Texas homestead exemption is one of the most valuable tax benefits available to Texas homeowners. As of 2023, the school district homestead exemption is $100,000 — meaning $100,000 of your home's value is exempt from school district taxes. At a typical school tax rate of 1%, that saves approximately $1,000 per year. Many cities and counties also offer additional homestead exemptions of 10-20%. You must apply by April 30 of the tax year you want the exemption to apply. File Form 50-114 with your county appraisal district — it is free.

• ✓Apply for homestead exemption by April 30 — file Form 50-114 at your county CAD website
• ✓$100,000 school district exemption saves approximately $1,000/year at a 1% school tax rate
• ✓Many counties and cities add 10-20% additional homestead exemptions
• ✓The 10% annual cap on taxable value increases also activates with homestead
• ✓If you are over 65: apply for the senior exemption and tax ceiling at the same time
• ✓Homestead exemption renews automatically — you only need to apply once

Step 2: Understand How Your Home Will Be Assessed

Texas appraisal districts assess every property annually as of January 1. For a newly purchased home, your purchase price is the primary data point the appraisal district will use to set your initial value. This means if you bought at a market price, your first assessment will be near your purchase price. In subsequent years, the district reassesses based on market trends — values can go up by as much as the market supports (with no homestead cap in the first year after purchase for new buyers).

• ✓First year: Assessment anchored near your purchase price
• ✓Subsequent years: Annual reassessment based on market trends
• ✓Homestead cap (10%): Once established, limits annual taxable value increases to 10%
• ✓Cap resets if you sell or lose homestead exemption
• ✓Your purchase price is public record — the district uses it
• ✓If market values have dropped since your closing, you may have grounds to protest

Step 3: Decide Whether to Protest Your First Assessment

Many new homeowners assume they cannot protest because their assessed value matches their purchase price. This is not always true. If you paid a premium above market value, if builder incentives inflated your nominal purchase price, or if comparable resales in your area are now selling below your purchase price, you may have grounds to protest. Additionally, if your home had a data error — wrong square footage, an improvement listed that does not exist — correcting it can reduce your assessment.

• ✓Paid above market: If comparables are selling lower than your purchase price, protest
• ✓Builder incentives: Rate buydowns or closing cost credits inflate the nominal purchase price — document and protest
• ✓Market has dropped: If resale prices in your area have fallen since your closing, protest
• ✓Data errors: Check your property record card for incorrect square footage, features, or improvements
• ✓No penalty for trying: Texas Tax Code §41.43 prohibits the district from raising your value just because you protested

Step 4: Set Up Annual Protest Reminders

Texas property taxes benefit from annual attention. The homestead exemption requires a one-time application but the protest is annual — each spring, your appraisal notice arrives and you have a window to challenge it. Set a calendar reminder for March 15 to watch for your Notice of Appraised Value, and for April 1 to compare your appraised value to recent comparable sales. TaxAppeal USA handles the entire protest process for $89 — no annual setup needed, just enter your address each spring.

Frequently Asked Questions