What Is a Homestead Exemption—and Why Is It a Smart Move for New Homeowners?

The short answer

A homestead exemption helps lower your property tax bill by reducing the taxable value of your primary home—making it one of the simplest ways to keep more money working for you.

You did it—now let’s make the most of it

Buying a home is a major milestone. It takes planning, discipline, and a lot of decision-making along the way.

Now that you’re here, there are a few smart steps that can help you take full advantage of homeownership—and a homestead exemption is one of them.

It’s a quick, valuable way to reduce your property tax burden and make your new home even more affordable long-term.

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So…what exactly is a homestead exemption?

In plain terms, it’s a reduction in your home’s taxable value.

Instead of paying taxes on your home’s full value, a portion is excluded—meaning your tax bill is calculated on a lower amount.

For example (based on current Texas school district homestead exemption amounts):

• Home value: $300,000

• Homestead exemption: −$140,000 *

• Taxable value: $160,000

That difference can translate into meaningful savings year after year.

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*The $140,000 exemption reflects the current state-mandated school district homestead exemption as outlined by the Texas Comptroller. Actual savings and taxable values may vary depending on local exemptions and eligibility. Exemption amounts are subject to change.

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Why it matters (especially in Texas)

In Texas, property taxes play an important role in funding local services like schools and infrastructure.

A homestead exemption helps balance those costs by lowering the portion of your home’s value that is taxed.

✔ Lowers your annual property tax bill

✔ Can create meaningful savings year after year

✔ Helps make long-term homeownership more affordable

✔ May unlock additional savings if you qualify (65+, disability, veteran status)

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A simple step to help you save

If you own your home and use it as your primary residence, there’s a strong chance you qualify for a homestead exemption.

And the best part? Once it’s in place, most homeowners only need to file once—as long as the home remains their primary residence.

How to get started

Applying for your homestead exemption is more straightforward than many people expect.

Here are a few helpful ways to get started:

• Visit your local appraisal district website to download the application or apply online

• Contact your county appraisal office for guidance on eligibility and deadlines

• Connect with your mortgage loan officer or our mortgage team—they’re always happy to point you in the right direction

• Explore resources from the Texas Comptroller for additional guidance and forms

Taking a few minutes to complete this step now can lead to long-term savings.

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The bigger picture: A strong start to homeownership

Homeownership is more than just having a place to live—it’s about building stability and creating opportunities for your future.

Small steps like filing your homestead exemption can help you make the most of that investment and keep your financial goals moving forward.

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Bottom line

A homestead exemption is a simple, effective way to reduce your property taxes and get more value from your home.

If you haven’t filed yet, it’s a great next step as you settle into homeownership.

And if you ever have questions along the way, our mortgage team is here to help guide you.

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