Texas Property Taxes and Homestead Exemptions for New Owners
Updated: Sep 30
A seller's property tax bill can provide useful background, but it should not be treated as a promise of what you will pay. Your ownership, available exemptions, the property's valuation, and local tax rates can produce a different result.
Before buying in McAllen or another Rio Grande Valley community, make property taxes part of your affordability research. After closing, keep reviewing them rather than assuming the first estimate will remain accurate.
Learn which figures you are comparing
Market value, appraised value, and taxable value are related but can differ. The local appraisal district determines values under Texas law. Applicable limitations and exemptions affect the values used for taxation, while local taxing units set their rates. [1]
Ask your lender or closing professional to identify the basis of the tax estimate. For a recently built home, specifically ask whether the figure reflects the completed home and land or an earlier stage of development. This question helps uncover an assumption that could make the first payment look artificially low.
Keep a copy of the estimate and the date it was prepared. When an updated notice or bill arrives, you will have something concrete to compare rather than relying on memory.
Understand what a homestead exemption changes
A qualifying residence homestead exemption removes part of a home's value from taxation. Eligibility generally requires an ownership interest and use of the property as your principal residence. Apply through the appraisal district serving the property and confirm the documentation and timing that apply to your situation. [2]
As of September 30, 2026, the Texas Comptroller lists a $140,000 general residence homestead exemption for school district taxes. This is a reduction in taxable value, not a $140,000 payment or a reduction of that amount in the tax bill. Other taxing units may offer different exemptions, and additional provisions may apply to eligible owners. [2]
For example, a qualifying home valued at $300,000 would have $160,000 remaining for school taxation after that exemption alone, before considering other applicable adjustments. The school tax rate would then be applied to the relevant taxable value. City, county, and other taxes require their own calculations.
Keep appraisal limits separate from tax limits
Texas provides a limitation on annual appraised-value growth for qualifying homesteads, generally involving the prior appraised value, a 10 percent increase, and the value of new improvements. The property's market value also matters under the statutory calculation. This is not a blanket promise that a tax bill cannot increase by more than 10 percent. [1]
Ask the appraisal district when a limitation applies to your ownership. Do not assume a previous owner's exemptions or limitations automatically continue unchanged for you.
Review notices and update your budget
When you receive an appraisal notice, check the property description, values, and listed exemptions. If something appears incorrect, contact the appraisal district promptly and review the notice's instructions and deadlines for challenging it.
If your lender collects taxes through escrow, ask the servicer how a changed tax bill affects your monthly collection. Keep your own records even when someone else pays the bill from that account.
Use the most appropriate annual tax estimate available, divide it by 12, and enter that monthly amount in BRASAL's mortgage calculator. Revisit the figure when better information arrives.
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