The 10% homestead cap and the tax ceiling
Two protections that only exist if your home has a homestead exemption on record.
Once a Texas home has a homestead exemption, its taxable appraised value cannot rise more than 10% a year plus new improvements (Tax Code §23.23), starting the tax year after the first year it qualifies. Owners 65 or older or disabled also get a school tax ceiling that keeps school taxes from rising except for improvements (§11.26). Both reset for a new owner.
The 10% homestead cap
The appraisal district can still raise your home’s market value as much as the market moves. But for taxes, a homestead’s appraised value cannot exceed the lesser of market value or last year’s appraised value plus 10%, plus the value of new improvements (§23.23).
The cap starts on January 1 of the tax year after the first year you qualify the home for a homestead exemption. That is why missing the exemption in your first year also delays the cap.
The school tax ceiling (the "freeze")
When you qualify for the over-65 or disability exemption, your school district tax on the home is capped at the amount for that first year. After that, the ceiling is reduced when the state compresses school tax rates or raises homestead exemptions, and it rises only for new improvements, such as an addition (§11.26). Cities, counties and junior college districts can choose to adopt their own ceilings.
A surviving spouse 55 or older can keep the ceiling, and you can transfer a proportional ceiling to a new Texas home with a certificate from your appraisal district.
Why both reset after a sale
The cap and ceiling belong to the qualifying owner, not the house. When a home sells, the new owner starts over: the first year is taxed on full appraised value, and the cap begins the following year once they have a homestead exemption.
Not sure what your record shows? The free check reads your county record with you, applies the rules on this page, and shows any back-year refunds and yearly savings. If you are already covered, it says so.
Run the free 3-minute checkCommon questions
How does the 10% homestead cap work in Texas?
Your homestead’s taxable appraised value cannot rise more than 10% a year over last year’s appraised value, plus the value of new improvements. It starts the year after your first year with the homestead exemption.
Does the homestead cap reset when you buy a house?
Yes. The seller’s capped value does not carry over. Your own cap starts the tax year after the first year you qualify for the homestead exemption.
Related guides
- Texas property tax exemptions at 65 and olderTexas owners 65+ get $60,000 more off school taxes ($200,000 total) and a school tax ceiling. When to apply, automatic approval, and surviving spouses.
- Just bought a home? Your homestead exemption checklistJust bought a home in Texas? When your homestead exemption starts, the January 1 rule, the seller’s exemption, the 10% cap reset, and your filing deadline.
- The Texas homestead exemption, explainedHow the Texas homestead exemption works: $140,000 off school taxes, $60,000 more at 65+ or disabled, who qualifies, how to file free, and late refunds.
Sources
- Texas Tax Code, Chapter 23 (Appraisal Methods and Procedures) — §23.23 — Texas Legislature
- Texas Tax Code, Chapter 11 (Taxable Property and Exemptions) — Texas Legislature
- Property Tax Exemptions — Texas Comptroller of Public Accounts — Texas Comptroller of Public Accounts
- r/texas — Bought a house this year, don't understand what… — Reddit
ExemptBack is private self-help software, not a government service, law firm, or property tax consultant. This guide is general information about Texas law, not legal advice. Your appraisal district decides every application.