Printable cheat sheet

Texas homestead exemption cheat sheet

How the homestead exemption reduces taxable value, the savings at the rate per $100, and the 10% homestead appraisal cap. Built for homeowners and for the Texas exam taxes topic.

Reviewed August 30, 2026 · Tax Code 11.13 and 23.23 · Outline #094401

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What it doesLowers taxable value

The exemption is subtracted from appraised value before the rate is applied.

Texas rate unitPer $100

Savings = exemption / 100 x rate per $100 of value.

2026 school exemption$140,000 general homestead

The mandatory general school-district residence-homestead exemption applies for the 2026 tax year.

Additional school exemption$60,000 age 65 or disabled

This is in addition to the general school exemption for a qualifying residence homestead.

10% appraisal capPrior appraised x 1.10 + improvements

Use the lower of current market value or the statutory cap amount, then subtract the exemption.

EligibilityQualified principal residence

Do not apply residence-homestead benefits to a nonqualifying rental, second home, or other property.

How to calculate the savings

  1. Start with the appraised value from the appraisal district (after any 10% cap).
  2. Subtract the homestead exemption amount the question gives to get the taxable value.
  3. Divide the taxable value by 100, then multiply by the rate per $100 for the tax.
  4. Compute savings as the exemption divided by 100, times the rate per $100.
  5. For a year-over-year question, apply the 10% cap to the prior appraised value first, add qualifying new improvements, and use the lower result or market value.
  6. Calculate taxing units separately when exemptions create different taxable values.

Traps to check

  1. Do not treat the exemption as a dollar-for-dollar tax credit; it reduces taxable value.
  2. Do not divide by 1,000; Texas rates are stated per $100 of value.
  3. Do not confuse the homestead exemption with the 10% appraisal cap; they are separate.
  4. Do not apply the exemption or the 10% cap to property that does not qualify as the owner's residence homestead.
  5. Do not assume every taxing unit uses the school-district exemption amount.
  6. Do not add ordinary repair or maintenance costs as new improvements under the cap formula.

Four worked examples

General school exemption$300,000 appraised value, $140,000 exemption, example $1.00 rate

$300,000 - $140,000 = $160,000 taxable. $160,000 / 100 x $1.00 = $1,600 annual school tax. The exemption reduces tax by $1,400 at this example rate.

Cap, then exemption$250,000 prior appraisal, $300,000 market, no improvements, $140,000 exemption

$250,000 x 1.10 = $275,000 capped appraisal. $275,000 - $140,000 = $135,000 taxable. At an example $1.00 rate, annual tax is $1,350.

Market below cap amount$315,000 prior appraisal, $360,000 market, $20,000 qualifying improvements

$315,000 x 1.10 + $20,000 = $366,500. Use the lower $360,000 market value. After a $140,000 exemption, taxable value is $220,000.

Question-supplied exemption$310,000 appraised value, $40,000 exemption, $1.95 rate

$310,000 - $40,000 = $270,000 taxable. $270,000 / 100 x $1.95 = $5,265 annual tax. Use the amount in the exam stem.

Work it without the answer showing

Decide whether market or the cap controls, subtract the applicable exemption, and apply the rate only after the taxable value is clear.

Problem 1 · exemption savings$420,000 appraised value, $140,000 exemption, and a $0.95 rate per $100. Find taxable value, annual tax, and annual savings.
Cap amount
Appraised value
Taxable value
Tax and savings
Problem 2 · cap applies$280,000 prior appraisal, $340,000 market value, no improvements, $140,000 exemption, and a $1.10 rate per $100. Find final annual tax.
Cap amount
Appraised value
Taxable value
Tax and savings
Problem 3 · market controls$300,000 prior appraisal, $322,000 market value, $15,000 qualifying improvements, $140,000 exemption, and a $1.00 rate. Find final annual tax.
Cap amount
Appraised value
Taxable value
Tax and savings

Answer key

  1. $420,000 - $140,000 = $280,000 taxable. Annual tax is $280,000 / 100 x $0.95 = $2,660. Annual exemption savings are $140,000 / 100 x $0.95 = $1,330.
  2. $280,000 x 1.10 = $308,000 capped appraisal. $308,000 - $140,000 = $168,000 taxable. $168,000 / 100 x $1.10 = $1,848.
  3. $300,000 x 1.10 + $15,000 = $345,000, so the lower $322,000 market value controls. $322,000 - $140,000 = $182,000 taxable. At $1.00 per $100, annual tax is $1,820.

Sanity check

  1. The exemption lowers taxable value. It is not a dollar-for-dollar tax credit.
  2. Capped appraised value must be the lower of current market value or the statutory cap amount.
  3. Apply the cap before the exemption and the exemption before the rate.
  4. At a fixed rate, a larger exemption must produce lower tax.
Practice the patternPass Texas drills homestead, property tax, and taxable value.

Use the calculator, the taxes topic practice, and Texas-specific questions at passtexasrealestate.com.

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Sources: Texas Comptroller residence-homestead exemption guidance, Texas Tax Code Section 11.13, Texas Tax Code Section 23.23, and Pearson VUE outline #094401. Other taxing units can use different exemptions, so verify live figures with the county appraisal district. For planning and exam prep only, not legal or tax advice. Reviewed August 30, 2026.

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