Understanding Property Tax Exemptions for Disabled Veterans in Texas

This month, I want to break down a topic that comes up often, especially with my veteran clients: property tax exemptions for disabled veterans in Texas. There’s a lot of confusion around what qualifies, how much the savings really are, and how these exemptions actually work in real life. Let’s clear that up.

First things first: who qualifies?

Simply being a military veteran does not automatically qualify you for a veteran-specific property tax exemption in Texas. To receive a Disabled Veteran Exemption, you must have a disability rating from the U.S. Department of Veterans Affairs (VA).

If you do qualify, the exemption can be partial or full, depending on your disability rating, and it applies only to the home you occupy as your primary residence.

I’ll add this personal note for context: I’m a veteran myself, but I do not have a VA disability rating. That means I’m only eligible for the Homestead Exemption, not the Disabled Veteran Exemption. I’m including the Homestead Exemption here because any homeowner who qualifies for a Disabled Veteran Exemption also receives the Homestead Exemption.

What is a property tax exemption?

A property tax exemption reduces the appraised value of your home before taxes are calculated. Lower appraised value equals lower property taxes.

In most cases, exemptions apply only to your primary residence, not second homes, vacation homes, or investment properties. The most common exemption is the Homestead Exemption, which applies specifically to your residence homestead.

How much is the Homestead Exemption in Texas?

Texas voters recently approved a constitutional amendment increasing the school district Homestead Exemption from $100,000 to $140,000, effective in 2026.

Here’s what that looks like in real numbers:

• Home appraised at: $440,000

• Homestead Exemption: $140,000

• Taxable value for school taxes: $300,000

If your school tax rate is 1%, that exemption saves you $1,400 per year, or roughly $116 per month. And that’s before factoring in any additional exemptions you may qualify for.

When can I file for the Homestead Exemption?

You no longer have to wait until January 1.

You can file immediately after closing on your home as long as you:

• Update your driver’s license to the new address

• Occupy the home as your primary residence

The form you’ll need is Form 50-114, Residence Homestead Exemption Application. Once submitted to your county appraisal district, the exemption takes effect once processed, though you typically won’t see it reflected until tax bills are issued in October.

How long does the Homestead Exemption last?

Once approved, the exemption generally stays in place as long as the home remains your primary residence. That said, counties may periodically ask you to re-verify your homestead status, often every five years.

If you move, the exemption does not transfer automatically. You’ll need to apply again for your new home, and the county will remove the exemption from the prior residence.

What is the Disabled Veteran Exemption?

If you have a VA disability rating, you may qualify for a Disabled Veteran Exemption in addition to the Homestead Exemption.

You’ll apply using Form 50-135, Application for Disabled Veteran’s or Survivor’s Exemption. The exemption amount depends on your VA disability rating and follows a tiered structure.

Disabled Veteran Exemption amounts

A very common misunderstanding

Many people assume that a $10,000 exemption means $10,000 less in taxes. That’s not how it works.

The exemption reduces the assessed value, not the tax bill itself. While it absolutely helps, the monthly savings are more modest than many expect, which is why it’s important to understand the math.

Do I need a VA loan to qualify?

No.

Your mortgage has nothing to do with property tax exemptions. You can have a VA loan, a conventional loan, or no loan at all. If you’re eligible, you can receive the exemption regardless of how the home is financed.

What changes with a 100% VA disability rating?

If you are rated 100% disabled by the VA, or receive a VA determination of unemployability, you are eligible for a full property tax exemption on your primary residence in Texas.

That means no property taxes owed on that home.

Expanded definition of “residence homestead” starting in 2026

Effective January 1, 2026, Texas House Bill 4647 expands the definition of a residence homestead for 100% disabled veterans and their surviving spouses. The exemption will now include associated personal property, structures, and improvements primarily used for residential purposes, as long as ownership matches. This offers broader and more comprehensive relief.

How lenders treat tax exemptions

Because you must close and move into the home before filing for exemptions, most lenders do not factor them into your loan at closing.

The main exception is for 100% disabled veterans. Many lenders will allow you to qualify without property taxes included in your payment if you agree to file for the exemption after closing. Not all lenders do this, but many will.

How tax prorations work at closing for 100% disabled veterans

Since lenders typically do not escrow property taxes for 100% disabled veterans, the first year can feel confusing.

If the seller owned the home for part of the year, they’ll credit you for their portion of the estimated taxes at closing. You’ll then use those funds to pay the partial tax bill when it arrives later that year. Any overage or shortage is reconciled by you.

Why you may still see a tax bill the first year

Even with a 100% exemption, you may receive a tax bill your first year. That bill reflects the time before you owned the home, when the seller was responsible for taxes. You’re paying it with the seller’s credited funds from closing.

How the exemption works for multi-unit properties

VA loans allow purchases of up to four units, but the 100% exemption applies only to the unit you occupy.

• Duplex: exemption applies to 50% of the property

• Four-plex: exemption applies to 25%

Surviving spouse exemptions

If you are the surviving spouse of a 100% disabled veteran, you may continue receiving the exemption if:

• You have not remarried

• The home was your primary residence at the time of the veteran’s death

• The home remains your primary residence

If you stay in the home, the exemption continues in full. If you move, the exemption amount carries over based on the prior home’s exempt value, which may not result in a full exemption on the new home.

A recent change to note

Effective January 1, 2026, Texas House Bill 2508 allows a total property tax exemption for surviving spouses of veterans who died from certain service-connected conditions presumed under federal law, including those covered by the PACT Act.

How do you apply?

Search for your county appraisal district and submit the appropriate forms:

• Form 50-114 – Residence Homestead Exemption

• Form 50-135 – Disabled Veteran’s or Survivor’s Exemption

Where to learn more

The Texas Comptroller’s website has excellent, up-to-date resources on all property tax exemptions:
https://comptroller.texas.gov/taxes/property-tax/exemptions/

If you’re a veteran or surviving spouse and want help understanding how this plays into buying, selling, or owning a home in Texas, I’m always happy to walk through it with you.