The Texas Homestead Exemption: What Hill Country Home Buyers Need to Know in 2026

If you are buying a home in the Texas Hill Country, the homestead exemption is the single most important property tax benefit you need to understand. It reduces the taxable value of your home for school district taxes, the largest component of your property tax bill, and it is not automatic. You have to apply, and the deadline is strict.

This guide covers the 2026 exemption amounts, the filing process, what happens when you buy mid-year, and how the system works in Kendall County, Bexar County, and Comal County. It is written for buyers who are new to Texas property taxes and want to avoid the mistakes that cost people thousands in unnecessary taxes.

The $140,000 exemption: what changed in 2025

In November 2025, Texas voters approved Proposition 13, which increased the standard homestead exemption from $100,000 to $140,000 for school district taxes [1]. The change took effect for the 2026 tax year. For a home appraised at $450,000 in Kendall County, the exemption means school taxes are calculated on $310,000 instead of $450,000.

The exemption applies only to school district taxes, which typically account for 50 to 60 percent of your total property tax bill. It does not apply to county taxes, city taxes, or special district taxes. Those entities set their own exemptions independently.

Who qualifies for the homestead exemption

The homestead exemption is available to any individual who owns and occupies a property as their primary residence. The basic requirements under the Texas Tax Code (Section 11.13) are straightforward [2]:

• You must own the property as an individual. Corporations, LLCs, and partnerships do not qualify.
• You must occupy the property as your principal residence on January 1 of the tax year (with an exception for new buyers, covered below).
• You may only claim one residence homestead at a time. If you own multiple properties, the exemption applies only to the one you live in.
• You must file an application with the county appraisal district where the property is located.

These conditions apply regardless of whether you are a first-time buyer, a retiree, or a California transplant. The homestead exemption is not means-tested. There is no income limit, no purchase price cap, and no restriction based on how long you have lived in Texas.

The new-buyer advantage: filing immediately after closing

One of the most important rule changes for 2026: under Senate Bill 8 (effective January 1, 2022), recent buyers can claim the homestead exemption beginning on the date they obtain ownership and occupy the home, rather than waiting until January 1 of the following tax year [3]. This means if you close on a home in July 2026 and move in immediately, you can file for the exemption right away and receive a prorated benefit for the remainder of the tax year.

Before this change, a July buyer had to wait until the following January to begin the exemption, losing six months of potential savings. Under the current rules, you should file Form 50-114 with the county appraisal district within 30 days of closing. Some counties process applications within weeks, others take months. The earlier you file, the earlier the savings begin.

The annual appraisal cap: a second layer of protection

In addition to the homestead exemption, Texas law limits how much a homesteaded property's appraised value can increase from one year to the next. Under the 10 percent appraisal cap (Senate Bill 2, 2019), the taxable value of a homesteaded property cannot increase more than 10 percent per year, regardless of how much the market value rises [4].

This cap is separate from the homestead exemption and applies automatically once you have filed and received the exemption. For a homeowner in a rapidly appreciating market like Boerne or Fair Oaks Ranch, the 10 percent cap prevents the county from reassessing your property to full market value in a single year. Without it, a home that jumps from $500,000 to $600,000 in market value would see an immediate 20 percent increase in taxable value. The cap limits that to 10 percent, or $550,000, in the first year.

One critical detail: the 10 percent cap applies only in the second year of ownership and beyond. Your first-year assessed value resets to your purchase price. If you buy a home for $550,000 that was previously assessed at $380,000, the assessed value jumps to $550,000 in year two (after the first-year proration period ends). The cap limits subsequent increases to 10 percent, but the initial reset is uncapped. This means your property tax bill can increase significantly in year two, and the homestead exemption is your primary tool for managing that increase.

Senior and disabled homeowner exemptions

Homeowners age 65 or older, or who qualify as disabled, receive additional benefits beyond the standard $140,000 exemption. Proposition 11 (2025) increased the additional exemption for these homeowners from $10,000 to $60,000, bringing the combined school district exemption to $200,000 [5].

Senior and disabled homeowners also benefit from a school tax ceiling, which freezes the school district tax amount at the level paid in the year the exemption was first claimed. If school tax rates increase in future years, the tax amount for the senior or disabled homeowner does not change, a significant protection for fixed-income households.

In Kendall County, the county itself offers an additional $10,000 exemption for over-65 homeowners on the county tax portion [6]. The City of Boerne and Boerne ISD each offer tax freezes for qualifying seniors and disabled homeowners. These local provisions vary by taxing entity, and the combined impact can reduce a senior homeowner's total tax bill by 30 to 50 percent compared to an unexempted property.

How to file: the application process

The standard application form is Texas Comptroller Form 50-114 (Application for Residential Homestead Exemption) [2]. The form is available from the county appraisal district website or the Texas Comptroller's website.

The annual filing deadline is April 30 of the tax year for which the exemption is sought. For new buyers closing mid-year, file immediately after closing; the April 30 deadline applies only to full-year claims.

Required documentation includes:

• Texas driver's license or state ID showing the property address
• Vehicle registration showing the property address
• Voter registration showing the property address
• A copy of the deed or closing statement
• Utility bills in your name at the property address

File with the county appraisal district where the property is located. For properties in Boerne, that is the Kendall County Appraisal District. For Fair Oaks Ranch properties that span multiple counties, file with the county where the majority of the property lies. The appraisal district will process the application and notify you of the decision. If approved, the exemption applies retroactively to January 1 of the filing year (or your closing date, if you qualify for mid-year filing).

What happens if you miss the deadline

If you miss the April 30 deadline for a full-year claim, you may still file a late homestead exemption application up to two years after the tax delinquency date [3]. However, the exemption will only apply to the current and future tax years, not retroactively to the year you missed. For a homeowner in Kendall County with a $450,000 home, missing the deadline by one month costs approximately $2,600 in school tax savings for that year.

For new buyers who close mid-year, the deadline is not April 30. It is the earlier of April 30 of the following year or one year after closing. File immediately after closing to avoid any gap in coverage.

How the exemption stacks with other benefits

The standard homestead exemption can be combined with other property tax benefits, including the disabled veteran exemption, the over-65 exemption, and local optional exemptions offered by counties, cities, and school districts [7].

For disabled veterans rated at 100%, the disabled veteran exemption (Tax Code Section 11.131) provides a full exemption from all property taxes, making the standard homestead exemption redundant for school district purposes. For veterans with partial ratings (10% to 99%), the disabled veteran exemption and the standard homestead exemption stack, providing separate reductions on the assessed value.

For senior homeowners who also qualify as disabled veterans, the benefits combine to produce the maximum possible tax reduction. A senior disabled veteran with a 100% rating pays zero property taxes. A senior with a partial rating receives the $140,000 standard exemption, an additional $60,000 over-65 exemption, and the applicable disabled veteran exemption amount, a structure that eliminates school district taxes for most properties under $400,000.

What this means for Hill Country buyers specifically

For buyers in Boerne, Fair Oaks Ranch, and surrounding Hill Country communities, the homestead exemption interacts with local tax rates in ways that directly affect your monthly housing costs.

A buyer purchasing a $475,000 home in Boerne ISD (Kendall County) with the standard $140,000 exemption pays school taxes on $335,000 instead of $475,000. At the Boerne ISD school tax rate of approximately $1.04 per $100 of assessed value, the exemption saves roughly $3,500 per year. Over a 30-year mortgage, that is more than $105,000 in avoided school taxes.

The savings compound when you factor in the 10 percent annual appraisal cap and any local optional exemptions. In Kendall County, the county itself has adopted a $10,000 exemption for over-65 homeowners. The City of Boerne offers a separate over-65 tax ceiling. Buyers who understand these provisions and file promptly capture savings that their neighbors who delay filing leave on the table.

For more context on how property taxes work across the Hill Country, see our Texas vs. California property tax comparison and our guide to the disabled veteran property tax exemption.

Frequently asked questions

Do I need to file the homestead exemption every year?

No. Once your application is approved, the exemption automatically renews each year as long as you continue to own and occupy the property as your principal residence. You only need to re-file if you move to a new home or if the property's ownership changes.

Can I claim the homestead exemption on a second home?

No. The exemption applies only to your primary residence. Vacation homes, rental properties, and investment properties do not qualify. If you own multiple homes, you must choose one as your homestead and claim the exemption on that property only.

Does the exemption apply to properties owned by an LLC or trust?

Properties owned by a corporation, LLC, or partnership do not qualify for the homestead exemption. Properties held in a qualifying trust may qualify if the trust beneficiary occupies the property as their principal residence. The rules for trust-owned homesteads are specific and vary by county. Consult the appraisal district or a real estate attorney for trust-owned property filings.

What documents prove residency?

The appraisal district typically requires two or more of the following: a Texas driver's license showing the property address, a vehicle registration at that address, a voter registration card, and recent utility bills. These documents must show the property address and the applicant's name.

Does the homestead exemption transfer when I sell my home?

No. The homestead exemption is tied to the owner-occupant. When you sell the property, the exemption ends with your ownership. The buyer must file their own homestead exemption application. This is a common point of confusion: the exemption does not automatically transfer to the new owner.

Can I claim the homestead exemption if I am building a new home?

You may file for the exemption once the home is substantially complete and you occupy it as your principal residence. While under construction, the property does not qualify. File Form 50-114 with the county appraisal district after you move in and the certificate of occupancy is issued.

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1. Texas Comptroller, Form 50-114 and Homestead Exemption FAQ. Application requirements, filing deadlines, and qualifying conditions for the standard $140,000 homestead exemption under Texas Tax Code Section 11.13. comptroller.texas.gov
2. Texas Tax Code Section 11.13. Statutory provisions governing the residence homestead exemption, including the $140,000 standard exemption for school district taxes. statutes.capitol.texas.gov
3. Senate Bill 8 (87th Texas Legislature, 2021). Changed homestead exemption effective date rules; allows new buyers to claim the exemption from the date of purchase rather than waiting until January 1. capitol.texas.gov
4. Senate Bill 2 (86th Texas Legislature, 2019). Established the 10 percent homestead appraisal cap limiting annual increases in appraised value. capitol.texas.gov
5. Ballotpedia, Texas Proposition 13 and Proposition 11 (2025). Voter-approved increases to the homestead exemption and senior/disabled additional exemption amounts. ballotpedia.org
6. Kendall County Appraisal District, Adopted Tax Rates and Exemptions. Local exemption schedules, optional county exemptions, and Boerne ISD tax freeze programs. kendallad.org
7. Texas Comptroller, Property Tax Exemptions Guide. Overview of all available property tax exemptions, stacking rules, and county-specific variations. comptroller.texas.gov

Updated July 27, 2026. Exemption amounts, deadlines, and local county provisions are subject to change. Readers should confirm current requirements with the relevant county appraisal district or a licensed Texas real estate professional before relying on any amount or deadline in this article.

This article provides general Texas real estate information, not legal, tax, or financial advice. Homestead exemption rules, filing deadlines, and county-level provisions vary. Consult the county appraisal district or a qualified Texas real estate attorney for advice specific to your situation.