Hundreds of thousands of potentially eligible Texas homeowners are not claiming the homestead exemption, a benefit that significantly reduces annual property tax bills. This oversight means many are paying thousands of dollars more in taxes each year, with experts and appraisal districts indicating the problem spans across the state.
The homestead exemption shaves at least $140,000 off the value that school districts tax. Additionally, it triggers further property tax savings if cities and counties offer their own exemptions, providing other benefits designed to prevent bills from rising too quickly. Without this exemption, homeowners risk being priced out of their neighborhoods, according to Johana Miranda of the Wesley-Rankin Community Center in West Dallas, a non-profit that operates the Homestead Preservation Center. Miranda stated, "It does make a huge impact on the decision of staying or having to leave."
In Dallas County, an estimated 57,000 households have left nearly $310 million on the table by not claiming the exemption, according to research from the Child Poverty Action Lab. Appraisal districts report similar figures in other major Texas counties: roughly 60,000 homeowners in Travis County and another 60,000 in Bexar County may be going without the exemption. Harris County could have some 113,000 homeowners eligible but not claiming the benefit. This represents approximately one in five potentially eligible households in Travis County, and about one in ten in Dallas, Bexar, and Harris counties.
The financial impact can be substantial. For example, the owner of a median-priced home in Dallas County without an exemption might have paid $7,062 in property taxes last year, compared to $4,573 with the exemption, representing a 35% savings. Older homeowners, aged 65 and over, would have paid even less, just $1,872, due to additional tax breaks.
Policy experts, non-profit workers, and appraisal district officials note that homeowners do not automatically receive the exemption, and many are simply unaware of its existence. To claim the benefit, homeowners must fill out an application, prove they own the home, and confirm it is their primary residence. However, this process can be complicated.
Challenges include language barriers, difficulty in proving home ownership—especially for first-time buyers or heirs who inherit homes without a lender or real estate agent—and the general complexity and jargon of the application itself. Heather Way, who leads the University of Texas at Austin School of Law’s Housing Policy Clinic, questioned how homeowners are expected to know about the exemption if their real estate agent or mortgage broker does not inform them.
Disparities in claiming the homestead exemption often align with racial and wealth lines. Research by the Child Poverty Action Lab shows that homeowners in Hispanic and Black neighborhoods in Dallas County claim the exemption at lower rates than those in predominantly white and Asian neighborhoods. Similar disparities exist between poorer and wealthier neighborhoods. Cynthia Martinez, chief strategy officer at the Travis Central Appraisal District, observed that people with more financial means are generally more likely to be aware of the exemption. Ashley Flores, senior director at Child Poverty Action Lab, suggested this could be partly because wealthier individuals often employ property tax consultants, a service that may be too costly for lower-income homeowners.
Local governments, appraisal districts, and non-profits have been actively working to identify and contact individual homeowners to encourage them to claim the exemption. State lawmakers have also taken steps to reduce barriers to obtaining the benefit. State Senator Paul Bettencourt, a Houston Republican, noted that the number of homeowners claiming the exemption has grown, with the comptroller's office reporting 6.28 million Texas homeowners had an exemption in 2025—an increase of 580,000 over two years. Bettencourt acknowledged an education gap but believes increasing the exemption amount is the main way to boost awareness. Still, policy experts suggest further legislative action could be beneficial.
Challenges persist for certain groups. Older homeowners may face hurdles such as having an expired driver’s license or state identification, which is required for the exemption. This issue became apparent when appraisal districts began sending letters to homeowners confirming eligibility, a requirement under a 2023 state law.
